Times of crisis and rapid social change often bring new business models, opportunities and ways services are delivered. The pandemic was such a moment, forcing businesses to re-evaluate how they worked and to find new ways of operating that reduced risk but enabled them to maintain their service.
The restaurant and hospitality industry were profoundly impacted by Covid-19, with business owners having to think creatively about how to continue trading during restrictions on public gatherings. Restaurants switched to takeaway delivery services, and dining spaces were reconfigured to consider public health concerns.
Outlets already operating in the fast-casual sector found it easier to adapt than traditional restaurants. As a result, the sector as a whole saw rapid growth that has continued now the immediate emergency is over, marking the beginning of an innovation era.
In 2022, the global fast-casual restaurant market was valued at around $190 billion and is expected to grow by 11.5% by 2028.
So, what is the fast-casual sector, and why is it rapidly growing?
What is the fast-casual sector?
The fast-casual sector is a restaurant industry segment that offers a higher quality of food and service than traditional fast-food chains but with a more casual and affordable experience than full-service restaurants. It is a hybrid model that combines the convenience and speed of fast food with the quality and customisation of casual dining.
Fast-casual restaurants often are innovative and flexible in what they offer. Typically, they feature menus with fresh, locally sourced ingredients with a range of healthier or vegan options. Customers may order and pay for their food at the counter or via digital methods, but the meals are often brought to their table.
This creates a more casual dining experience without compromising on the quality of the food. The model is particularly popular with a younger demographic who are passionate about good food, their dietary choices and outstanding ingredients but dislike the formality of traditional restaurants.
The rise of the fast-casual sector can also be viewed alongside the street food phenomenon of the last decade, where high-quality, often specialist or locally sourced food is sold from street outlets. The fast-casual sector offers some of the informality and dynamism of street foods with the comfort provided by restaurants. Consumer trends show that purposeful, mission-based businesses that focus on community involvement also have a loyal customer base.
Why is the sector growing?
The recent rapid sector growth is driven by several factors. Firstly, fast casual restaurants have lower running costs than traditional restaurants. In a sector with a high failure rate, this makes the fast-casual model attractive to would-be entrepreneurs.
It also meets a growing demand, with customer preferences changing for high-quality food in a relaxed, unfussy manner. The economic importance of younger groups and the drop in older people eating out because of the pandemic has made the relaxed, fast-casual format more popular.
Fast-casual restaurants often allow for customisation, allowing customers to adapt their orders to suit their preferences. This meets the expectation of individualised service that younger demographics often expect.
Fast-casual restaurants have also been at the forefront of technological innovation and automation in the restaurant industry, with many implementing mobile ordering, contactless payment, and other cutting-edge technologies to improve the customer experience.
Overall, the more relaxed and convenient nature of the fast-casual dining experience strikes a chord with changing consumer tastes and expectations while providing lower barriers to entry for food-passionate entrepreneurs.
How we help the fast-casual sector
At Wilder Coe, our financial experts help start-ups and established businesses negotiate the challenging world of technology and finance.
Chris Gent, a Partner at Wilder Coe with specialist knowledge within the technology and hospitality sectors, highlights that “although the pandemic caused several chains to collapse or downside, the gaps left in the market provide ample opportunity for new brands to enter. We are also witnessing the rejuvenation and rebirth of many hospitality businesses, especially within the fast-casual sector.”
We have many years of specialising in travel, hospitality and restaurant sectors and helping clients like Tossed navigate complex tax and accounting matters. Our advisors can incorporate new ventures, assist with financial reporting or VAT returns and provide transactional advice on restaurant acquisitions.
Contact us to find out how Chris Gent and the travel and hospitality teams can help you turn your business idea into a success!
