Major trends impacting quick-service restaurants
Value and convenience are constantly top of mind for consumers.
Economic challenges, changing consumer tastes, and the rise of a new consumer segment have continually kept quick-service restaurants on their toes to deliver their promise of fast and affordable food. But as these definitions keep changing how can brands react?
Roxanne Uy, Senior Manager, at one of the world’s leading research firms Circana, will share insights on shifting consumer behaviours in the quick-service restaurant sector, highlighting key trends and challenges shaped by current economic pressures at the upcoming QSR Media Conference & Awards 2024 powered by Red Bull.
The QSR Media Conference & Awards 2024 is a gathering of C-level executives and other top management to engage in meaningful discussion about the changes in the fast-food restaurant and service sector.
Ahead of the conference, Roxanne shares some of her thoughts on today’s trends.
What are the key trends and developments currently shaping the quick-service restaurant industry in Australia?
Amidst the current economic environment, trading down is a trend that we see not only in Australia but also in the global QSR scene. Inflationary pressures are putting a strain on household budgets, leading consumers to adopt a value-driven mindset in out-of-home consumption.
Consumers demonstrate trading down in various ways – shifting from full-service dining to QSR to retail; engaging in cheaper dayparts such as morning meals and snacking; and skipping add-ons such as desserts or sides.
In what ways have you noticed technology influence the industry? Could you share an example?
Pickup ordering – the service method wherein consumers pre-order via a digital platform such as an app or website before picking up their order in-store – has been a key driver of QSR traffic recently. Based on CREST data, we can infer that consumers have been switching over from delivery to pickup not only for the convenience it offers anyone with a hectic lifestyle, but also presumably to avoid the hefty delivery fees which are increasingly being felt now by the already budget-conscious consumers.
From your vantage point, what do you see as the major challenges and opportunities for the quick-service restaurant industry over the next five years?
The cost-of-living pressures will continue to impact consumer engagement with the industry, with traffic growth expected to be a significant challenge for many operators. As consumers strive to stretch every dollar, the focus on value will be key to driving consumer engagement and ensuring that traffic is a key driver of spending growth.
Moreover, though lunch and dinner will remain the core dayparts in QSR, the smaller dayparts such as morning meals and snacking are expected to drive consumer traffic moving forward. As such, the operators that can hold their ground at the core dayparts whilst also capturing the opportunities in the fringe dayparts will stand out.
What strategies do you recommend QSR operators adopt to enhance value, and effectively attract and retain customers?
Consumers continue to engage in discretionary spending on eating out and food delivery, but they are increasingly becoming more prudent as they do. As such, they strongly gravitate towards value-driven (rather than price-driven) purchases. Thus, when putting forward promotional offers or bundle meals, QSR operators must understand that consumers’ definition of ‘deals’ has evolved. Today, it is not just all about price, but also about product quality and overall value for money.
Additionally, proactively cultivating consumer loyalty remains a key strategy to grow traffic amidst a gloomy business environment. In Australia, brand loyalty has always been amongst the top motivators for consumers when visiting a QSR outlet. Earning points, redeeming points for discounts, and birthday rewards/offers are some of the popular loyalty benefits that consumers value the most.
Hear more from Roxanne at the QSR Media Conference & Awards 2024 this 23 September at the Hilton Sydney Hotel in Sydney, Australia. For more information, please click this link.
