3 Areas of Focus When Fighting for Market Share–Casual Dining Industry

US casual dining restaurants enjoyed a steady growth of about 4.3% from 2011 to 2016. However, that growth is expected to slow to about 2% (IBISWorld Reports, 2016 Chain Restaurants report). Why? Because consumers want greater convenience at lower cost—and they also want high quality food. Fast casual brands have stepped into that niche and are taking market share from traditional casual dining brands.

Our newest panel research in the casual dining sector corroborates the premium placed on value. Over 9,000 consumers rated their experiences at various casual dining brands in six different sectors, including their overall satisfaction and loyalty to the brand. In every sector we measured, perception of value was a critical component of overall satisfaction and loyalty. In fact, best scoring brands in each of six sectors (listed below) had very high ratings for both value received and high quality food:

  • General Menu: Cheddar’s Scratch Chicken
  • Breakfast: Bob Evans
  • Pizza: Pizza Ranch
  • Italian: Maggiano’s
  • Steakhouse: Texas Roadhouse
  • Seafood: Pappadeux

Intense competition in this industry will continue for the next five years. Casual dining brands can remain relevant by focusing on three critical areas as they fight for market share:

  1. Menu innovation. Brands must continue to find ways to meet consumer demands for attractive menus and be aware of increasing desires to eat healthy foods. Consider using menu studies to measure impact of menu changes on satisfaction, loyalty and spend.
     
  2. Competent staff: The long-term trend of declining wages as a share of revenue due to the automation of the food preparation process is expected to continue, according to IBISWorld. Casual dining brands will need to continue their investments in staff—especially because part of the value proposition includes full service. If service is not exceptional, consumers will not be willing to pay a price premium. Make sure you measure the effectiveness of your training programs and your ability to engage and retain employees.
     
  3. Technology to deliver convenience: 37% of consumers in our research reported they had seen tablets at a casual dining restaurant and 87% of those used them. Casual dining brands can use tabletop technology to address consumers’ needs for convenience—but they must still process orders efficiently, get them to the table, and perform check backs throughout the meal. The technology itself will not ensure restaurants deliver on standards.

The restaurant business is tough. Brands must manage supply chains, labor, franchising models, and technology. In this mature market, taking share can only be done by delivering on the brand promise and expected value equation—at every location. To learn more about restaurant research and what guests experience at your brand, give us a call at 877.329.9621 or schedule a briefing below. We’d be glad to provide you with a walkthrough!

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As Chief Strategy Officer, Cheryl aligns Market Force's strategic direction with our clients' strategic objectives. She oversees the North American client base, Analytics and Insights, Winnipeg Operations and Marketing. She has a Ph.D. in social psychology and broad business experience in both private and public companies.​