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Report: Full-Service Restaurants Face Uphill Battle
Illinois Ag Connection - 05/19/2017

Technomic reporting indicates that the restaurant industry overall fared relatively well in 2016, but full service has experienced some highs and lows, with annual sales growth dipping to 1.4% and unit growth remaining flat. Traditional casual-dining chains most heavily contributed to this segment's troubles. The top five largest full-service brands, four of which are casual dining, all either had negative or slow sales in 2016.

"Full-service chains continue to face strong competition from full-service independents and regional chain restaurants, which provide a more local experience," says Darren Tristano, Winsight's chief insights officer. "Today's consumer looks for a more contemporary atmosphere, a strong adult beverage program and a menu of food and beverages that caters to local preferences. Operators also face stiff competition from limited-service restaurants that offer value, convenience, speed and customization."

Bright spots within full service are polished/upscale and contemporary casual-dining chains, which increased sales by 4% and 4.5%, respectively. Even fine dining saw sales growth rise by 4.9% due to the affluence of the sector's customer base, quality of offerings found at these brands and appeal this segment has with today's consumer.

Growth categories include:

- Asian: The 4.3% sales jump of this category represents consumer interest in more specialty-focused brands, as well as the continued appeal of ethnic cuisines.

- Sports Bar: The 3.9% sales increase for this menu category demonstrates that opportunity still exists for brands to appeal to consumers with a varied craft beer selection, craveable pub fare like burgers and wings, and an overall sports-focused atmosphere.

- Steak: This segment, which saw sales up 2.9%, had strong results from Texas Roadhouse (up 8.8%). Steakhouses are finding favor with consumers because they marry quality food and service with an inviting atmosphere.

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