Appetite for QSR grows in 2005

Quick-Service
Restaurants National Annual Report—2005

Despite criticism of fast-food by consumer advocacy groups and news media warning about an obesity epidemic, QSR usage is up significantly, according to Sandelman & Associates’ Quick-Service Restaurants National Annual Report – 2005.

In fact, the study of 2,400 QSR users interviewed in 2005 found frequency among all QSR users recovered nicely in 2005, up 10 percent over 2004 to 17.2 purchases per month and nearly back to the five-year high of 17.7 in 2003.

The study also found that 93 percent of respondents are QSR users, and nearly half of those are heavy users, indicating that a sizable portion of the U.S. population eats fast-food nearly every day.

Visitation revived among young users, too. Frequency among young users had declined in 2004 but came back this year to match the 2001 level. Although 16 to 24 year olds visited most often (20.1 times a month), 35 to 44 year olds rivaled young users in frequency (19.1 monthly visits). In fact, 17 percent of QSR occasions were owing to 35-to-44-year-old males in 2005, up from 14 percent in 2001. Contribution among males ages 35 to 44 has increased over the past five years, while contribution by young users has decreased. Fast-food chains have been trying to meet consumers’ changing needs by offering relatively healthful and premium options. As a result, usage among specific demographic groups increased, changing the profile of a typical fast-food user. Notably, females logged 16.2 monthly occasions, the highest level in the past five years. But females still trail males, who account for 18.1 occasions per month.

It appears higher income users are returning to QSRs. Frequency among users with annual household incomes under $50,000 increased slightly last year, but the most significant five-year trend is among those with incomes between $50,000-$74,999. (See chart.)

Another boon for the industry: Average spending at QSRs has increased steadily over the past five years with average spending per person up to $5.13. Spending levels may be affected by price increases, promotion of premium items and relatively pricey healthful options.

Quick-Service Restaurants National Annual Report – 2005 presents 2005 findings and analysis, plus five-year trends. Get details on patronage patterns for several QSR segments, including heaviness of usage, meal daypart and service mode usage, key demographics and last purchase occasion. Details on 24 major chains. To order a copy, log onto www.sandelman.com/reports.

Health and variety gaining in importance

An increasing percentage of customers desire healthful, nutritious food and broader menu variety at QSRs, found Sandelman’s Quick-Track® study.

Fully 43 percent of QSR customers rated “availability of healthy/nutritious food” “extremely important” in 2005, up from 35 percent in 2001. In fact, it is the only attribute of 12 studied that posted increases each year over the past five years. “Variety of menu items” also has gained: 36 percent in 2005 rated it “extremely important” compared with 32 percent in 2001. Many QSR chains have responded to this growing interest by offering—or expanding their selection of—entrée salads, veggies, fruit and other items that are perceived to be healthful and nutritious. Over this same five-year period, consumers have increased their visits to fast-food restaurants from 16.3 to 17.2 occasions per month. “We think this increased patronage is due, at least in part, to the heightened interest in and broader availability of healthful menu items,” says firm CEO Bob Sandelman.

Based on customer ratings of these measures, the industry has stepped up to the plate. In 2005, 20 percent of users rated QSR chains “excellent” on the availability of healthful food compared with 15 percent in 2001. On variety, 33 percent of users rated chains “excellent” in 2005 compared with 31 percent in 2001.

That's a handsome (occasion) profile

Restaurant chain marketers use Sandelman's Casual Dining Occasion Profiler — 2005 to compare their chain’s occasion profiles to those of their competitors and to track changes over time. Data is provided for 46 major casual dining chains. All occasion measures are broken out by meal occasion, service type used, main meal item eaten, heaviness of QSR usage, gender, age, income and ethnic group. Subscribers receive a detailed occasion profile for one chain of choice.

When it comes to beverages ordered at casual dining restaurants, soda is No. 1 with diners 44 years old or younger, while coffee is the leader for the over-45 set. (See chart.) To order a copy, log onto www.sandelman.com/reports.

Kudos to Awards of Excellence winners

Congratulations to the 31 QSR chains that garnered 2005 Quick-Track® Awards of Excellence.

In 2005, more than 62,000 Quick-Track respondents in 61 markets rated fast-food chains they had visited in the past three months. Fully 36 percent of all QSR chain customers rated their last occasion "excellent" overall, consistent with the peak satisfaction levels of 37 percent in 2004. Extensive results are presented in the QSR Customer Satisfaction & Brand Positioning Report – 2005.

"It's impressive that 12 chains were rated excellent overall by at least half of their customers," says Bob Sandelman, CEO of Sandelman & Associates Inc. In 2005, many of the chains with the highest overall ratings feature pizza. “It is clear that many pizza chains are doing what’s necessary to satisfy their customers,” Sandelman adds.

Regional pizza chains excelled in 2005, capturing three of the Top 10 spots in the Top Rated Chains Overall category. The three chains are Idaho Pizza Company, Chicago Connection Pizza and Imo’s Pizza.

Customers continue to give the highest marks to specialized regional chains, including those characterized as "fast casual."

Which chain is rated No. 1? In 2005, In-N-Out Burger edged out Panera Bread for the highest overall rating of last purchase occasion after tying the fast-casual concept for top honors the past two years. Notably, 57 percent of customers rated In-N-Out excellent (a rating of five on a five-point scale); Panera Bread was deemed excellent by 56 percent of customers. In-N-Out offers a simple menu of burgers, fries and milk shakes. Chains are rated by past-three-month patrons based on their last occasion.

Respondents rate on a five-point scale their last occasion overall, plus rate chains on 12 customer satisfaction attributes. Many chains that sit atop the overall ratings fare well on individual attributes, too.

In-N-Out received a total of 15 awards, scoring higher than all other chains on several key attributes, including quality of ingredients, taste of the food, temperature of food, friendliness/courtesy and order accuracy. Panera Bread, a fast-casual bakery/café concept, earned seven awards, including the highest rated chain on restaurant cleanliness.

Chick-fil-A garnered awards in six categories, including speed of service and overall appeal to kids. Chipotle placed in the Top 3 on speed of service and accuracy in filling orders.

The QSR Customer Satisfaction & Brand Positioning Report – 2005 includes a variety of detailed lists ranking chains for all chain types and within chain type. Chains that improved overall from the prior year also are identified and ranked overall and by chain type. To order a copy, log onto www.sandelman.com/reports.

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