In recent years, the rise of better burger franchises and fast-casual chains such as Panera Bread and Chipotle has put pressure on sit-down chain restaurants and classic fast food joints alike. As the competition for diner dollars evolves, here are some of the trends shaping the increasingly crowded marketplace.
Fast Food Going Upscale
One hardly expects fine dining at an establishment with a drive-thru. That hasn’t stopped some of the greasiest fast food chains from trying to go fancy. Attaching the word “artisan” on menu items is one example. Domino’s is notorious for that, as it is for stunts like adding luxury ingredients like foie gras onto pizzas. McDonald's and Wendy’s are both redesigning locations with a sleeker, more upscale look and feel. Taco Bell, meanwhile, has been trying to completely revamp its menu and vibe, which includes the national launch of “gourmet inspired” Cantina Bell items created through a partnership with Lorena Garcia, a chef who has been a part of reality shows such as “America’s Next Great Restaurant.”
Multi-Course Meal Deals
There is never a shortage of promotions at chain restaurants. Most involve a roster of specially priced items, and the hope is that if diners order one of them, they’ll also go for sides, desserts, and other extras—at full price. Lately, though, several chains are promising to pack in value by offering a full meal with several courses, all for one low price. Olive Garden did just that a few months ago with a $12.95 create-your-own deal that included soup or salad, a choice of entrees, and a mini-dessert. Outback Steakhouse and Red Lobster currently have similar deals—a three-course dinner featuring a 6 oz. steak for $11.99 and a four-course “Seafood Feast” for $14.99, respectively. T.G.I. Friday’s has a mini version meal deal, with one entrée and either an appetizer or dessert for $10. Restaurants can’t make much money off of such orders, but these specials may attract customers who might not have otherwise come out—and they may bring with them friends and family who’ll order meals with a bigger markup. And even though these specials are billed as full meals, guests will probably wind up paying for something else. Namely, drinks.
Stealing the Competition’s Playbook
Every chain has its core specialties—the menu items that set it apart from the competition. Sometimes, though, restaurants want to challenge the competition directly, and they do so by mimicking their counterparts’ menu. Pizza Hut, for instance, recently began encroaching on the turf of Subway and Quiznos with a lineup of hot P’zolo sandwiches. For its part, Subway has apparently been testing a new Doritos nachos menu item, akin to something you’d expect at Taco Bell. Similarly, McDonald’s has been selling pastries in certain locations, apparently in an attempt to steal business away from Dunkin’ Donuts. The strategy worked, after all, when McDonald's upgraded its coffee a few years back and seemed to be able to draw customers away from DD and Starbucks.
Sometimes, as in the case of Quiznos (and now, Pizza Hut), sandwiches are literally hot. The growth of sandwich shop chains, as well as sandwich items on chain restaurant menus, is also hot. The most recent Sandwich Consumer Trend Report (yes, there is such a thing) from the research firm Technomic shows that 49% of consumers now purchase their sandwiches away from home, compared to 44% two years ago. In 2011, as the industry lost 4,500 restaurants overall, some 800 limited-service sandwich restaurants were added.
Touchscreens Used to Upsell Customers
Small interactive computer screens have been popping up on the tables of restaurants such as Chili’s and Applebee’s. They have entertainment features, allowing diners—or their kids—to play video games and watch movie trailers. But restaurants may be most interested in these screens because they help sell food and drinks. The Smashburger chain says digital menu boards placed at cash registers have proven successful in getting customers to add on extras like milkshakes and fries, and the Wall Street Journal reports that dessert orders rise 30% after screens displaying the desserts are installed at restaurants.
Free Wi-Fi as a Draw—and the Standard
Eight years ago, Panera Bread did something that was unusual at the time: It started offering free Wi-Fi to all customers. Some independent coffee shops and restaurants had free Wi-Fi then, but national chains including Starbucks charged for Wi-Fi then. As USA Today reports, the move by Panera Bread paid off right away, with sales increasing 15%. The move also started a trend, as Starbucks, McDonald’s, and others now offer free Wi-Fi. Panera’s latest challenge is that its service may be becoming too popular. Free Wi-Fi has become even more of a draw in recent years as wireless carriers have begun getting rid of unlimited data plans. In April, there were 2.7 million connections to Panera’s wireless network, up from 2.2 million monthly a year ago, and all of the traffic has slowed service.
We Just Keep On Driving Thru
The NPD Group’s latest study backs up the perception that we’re a culture of constantly on-the-go, not to mention constantly hungry, people. In 2011, Americans made 12.4 billion visits to fast-food drive-thrus, a 2% rise from the previous year. Hamburger joints, unsurprisingly, were our favorite spots for drive-thru orders: 57% of all visits to McDonald’s, Burger King, Wendy’s, and other fast-food hamburger restaurants were of the drive-thru variety. Helping the cause has been fast food chains’ innovations to make the drive-thru faster and more satisfying, including multiple lanes for ordering and specially designed cups, wraps, and sandwiches suited for in-the-car enjoyment.