Shopping Center Business

MAY 2015

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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210 • SHOPPING CENTER BUSINESS • MAY 2015 Haisten Willis Restaurants rush to meet growing demand for high-quality fast dining. Hungry To Fill Fast Casual Gap D on't look now, but there could be a land rush taking place as fast casual restaurant chains ex- pand across the United States. Fast ca- sual restaurants, a blend of quick service and casual dining, are quickly growing in popularity as consumers gravitate toward higher-quality foods when grabbing a quick lunch or dinner. The fast casual concept offers cus- tomization in menu choices and freshly prepared dishes. Fast casual restaurants usually do not include a drive-thru win- dow or table service. While there is no standard definition for fast casual, most in the industry agree on certain aspects of the category. "Fast casual is typically a non drive-thru restaurant where customers order at the counter and seat themselves," says Mi- chael Walters, vice president of Falcon Restaurant Advisors, a Dallas-based com- pany that represents restaurant concepts and landlords on a national basis. "Fast casual restaurants also source most of their products locally, and avoid frozen foods wherever possible." Walters says the restaurants are growing so fast because there is a high demand for them and, for now, a lack of supply of space for them to locate. The combined sales of fast casual res- taurants in the United States grew by 10.5 percent in 2014, compared with 6.1 per- cent sales growth for fast food chains, ac- cording to Mintel, a market research firm. The cost is also higher for customers when compared to quick service restau- rants, otherwise known as fast food. The average quick service customer spends be- tween $3 and $6 per person for a meal, while at a fast casual establishment the prices ranges from $8 to $15 per meal, according to Forbes. SucceSS StorieS Chris Cheek is the chief development officer for Newk's Eatery, a fast casual restaurant chain based in Jackson, Missis- sippi. Cheek says the origins of fast casual restaurants date back to the late 1980s. He says today's rapidly expanding brands are the second phase of fast casual. The first generation included chains like Panera Bread, McAlister's Deli, Jason's Deli and other bakery cafes. He says there are a few key differences between those restaurants and today's second-genera- tion fast casual restaurants, which began expanding around the middle of the last decade. "Newk's Eatery was started in 2004, and that's around the time that restau- rants such as Chipotle and Zoe's Kitchen started to take off," says Cheek. Second generation fast casual restau- rants are more culinary-driven, according to Cheek, with more ingredients made from scratch inside the restaurant and more customization. Second generation also often includes an open kitchen visible to customers. There has also been an expansion in the types of food the restaurants focus on. Newer fast casual restaurant con- cepts often specialize in a certain type of food, ranging from pizza to hot dogs and bratwursts, gourmet burritos, ham and cheese sandwiches and even Mediterra- nean dishes. Chipotle is one of the leaders in the fast casual restaurant business. The com- pany's total sales are growing at about 20 percent annually. Denver-based Chipo- tle, which was founded in 1993, operates Newk's Eatery is a fast casual restaurant chain based in Jackson, Mississippi. Newk's serves salads and sandwiches in a total of 78 locations across 13 states.

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