Dive Brief:

• Visits at QSR and fast casual restaurants continued to outstrip full-service dining competitors throughout 2023, according to a whitepaper from Placer.ai emailed to Restaurant Dive.
• The QSR and fast casual segments have seen visits rise year over year each quarter since at least Q1 2023, while full-service chains saw traffic slide in Q2 and Q3 2023. Full-service traffic was virtually flat in Q4 2023 and Q1 2024, according to Placer.ai.
• Placer.ai argues the continued divergence in visit numbers between categories may be due to the higher speed of service in QSR and fast casual. Simply put, fast food is getting faster, which increases the segment’s edge over others and may eventually drive some full-service chains to look to faster production methods during low-traffic dayparts.

Dive Insight:

Several major QSR chains studied by Placer.ai have seen speed of service improve over recent years.

For example, the share of Taco Bell visits lasting 10 minutes or less rose from 58.4% to 62.9% from 2019 to 2023. Wendy’s, in the same time frame, saw visits under 10 minutes rise from 56.4% to 60.5%. Even as Chick-fil-A’s average unit volumes surged to an astronomical $9.3 million at its standalone restaurants, the portion of visits meeting that 10-minute deadline swelled from 48.5% pre-pandemic to 51.9% last year.

While trials of specific store designs may indicate a way to speed up throughput at specific concepts, a broad, multi-year speed-up is likely explained by the increased labor productivity of the restaurant industry, as measured by the Bureau of Labor Statistics.

Restaurant labor output per hour was 13% higher in 2022, the latest year for which data on restaurant labor productivity is available, than in 2019. As the labor market cools, productivity may increase as labor turnover falls.

Many full-service and casual dining chains continued to see falling year-over-year traffic through the end of 2023. While some did see improved traffic sequentially in Q4 2023, many executives shared flat predictions for visits for 2024. 

Placer.ai predicted full-service brands would begin to experiment with faster services. Applebee’s, the data firm noted, opened a fast casual unit, Applebee’s To Go, in Deer Park, New York, last year. According to Placer.ai’s data, that unit has seen particular success in the lunch daypart, with 20% of its visits between noon and 2 p.m., compared to 8% for other Applebee’s in the same region. Likewise, the share of its visits occurring on weekdays — about 70% — is higher than the roughly weekday proportion at nearby Applebee’s restaurants, at roughly 62%.

“Takeaway-focused venues could help full-service chains grow their visit share during weekdays and the coveted lunch rush, when consumers may be less inclined to have a sit-down meal,” Placer.air wrote in the report.

Some casual dining brands have shifted their focus toward on-premise service, like Red Robin. Others, like Denny’s, have instead continued testing or expanding their employment of virtual brands, which are a highly visible example of takeaway-focused concepts.