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Fast Casual Competition

Posted by capital on March 6, 2017
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It’s a challenging and competitive for fast casual restaurants. The increased competition in burgers has led to declining sales for mid tier chains such as Five Guys. The new generation of fast casual and casual dining restaurants such as Shake Shack, Smashburger, and Umami offering higher quality burgers has increased over the past 36 months. There is increased competition for customers and top locations alike. There are only so many premium location end cap spaces available. National chains have an edge in building brand awareness, and marketing will continue to be important for fast casual chains to get above the fray. The fast casual war is leaving a wake of weaker restaurants going bust. The frozen yogurt market is experiencing consolidation after a massive expansion by national chains and mom-and-pop operators. Pinkberry was sold to Cold Stone Creamery ,  locals such as Yogurt Crazy and  FroZenYo are closing stores and rethinking their business model. However, many see opportunities in the pizza and ethnic food cuisine segments.  Indian and Southeast Asian are among the top five food trends so far this year according to the National Restaurant Association. The competition among other categories such as burgers, yogurt and Mexican food is one factor behind the expansion of lesser know cuisines.  The most successful ethnic fast casual niche operators will be those who can offer up fantastic high quality food while educating the consumer. Many operators do this through the use of social media with photos, video, and menu descriptions making unfamiliar foods seem more familiar.  Choolaah Indian BBQ, a Cleveland-based- fast casual restaurant which just opened at Mosaic has big plans for expansion. Some such as Tava Kitchen are reviewing their expansion plans.  Tava Co-owner Hasnain Zaidi who recently closed his store in Palo Alto explained in an interview with the Almanac, “now as much as ever restaurateurs need to be thoughtful about every location they open”. Good advice for anyone looking to open a store.