Industry Standards: Restaurants PDF Free Download
1 / 24/24
100%
INDUSTRY STANDARDS
1
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS
RESTAURANT SEGMENTS
LIMITED SERVICE (LSR) - Counter service where patrons pay before eating
• Quick-Service Restaurants (Average check under $9.50)
• Fast Casual (Average check over $9.50 or more)
FULL SERVICE (FSR) Table service + wait staff where patrons pay after eating
• Midscale (Average check under $12)
• Casual Dining (Average check between $12-$50)
• Fine Dining (Average check over $50)
The ITW Food Equipment business offers a broad line of equipment to the foodservice industry.
With a portfolio that includes dishwashers, mixers, refrigeration and cooking equipment, it sells to
a wide variety of operator segments throughout foodservice. In building this handbook, ITW asked
Technomic to provide insights to populate the handbook with insights on these key channels/
segments. Required insights included market metrics—size, growth, key players, etc.—along with
trends and influences in each segment.
INDUSTRY STANDARDS
2
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | LIMITED SERVICE LSR
81%
Quick
Service
19% -
Fast Casual
Restaurants that offer counter service where patrons generally order or select items and pay before
eating. Food and drink may be consumed on-premise, taken out or delivered to customers. In some
hybrid concepts, runners bring food to tables. Subsegments of limited service include quick service
and fast casual.
WHAT IS AN LSR (Limited Service Restaurant)?
The limited-service restaurant segment has
seen a few periods of fluctuations, with year-
over-year growth dipping to 3.5% and 3.9% in
2013 and 2017.
Growth rates for this segment have recovered
in 2018 to 5.1% and the segment is expected to
grow at or over 5% going into 2022.
2018
LSR Sales
$289.6B
2022 F $360.0
$289.6
$243.7
2018
2014
Limited-Service Restaurant Sales ($B)
YEARS CAGR %
‘14’18 4.4%
‘18’22 5.6%
‘14’22 5.0%
The limited service restaurant segment was worth
$289.6B in 2018. Within this segment, the quick-
service restaurant segment has the largest share
of total sales at about 81% while the fast-casual
segment forms a smaller proportion of the total
segment and has about 19% of the total sales.
The limited-service restaurant segment has grown by
an average of 4.4% in consumer spending between
2014 and 2018 and is expected to grow around 5.6%
on average and value $360B by 2022.
INDUSTRY STANDARDS
3
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | LIMITED SERVICE LSR
2012 2013 2014 2015 2016 2017 2018 2022 F2021 F2020 F2019 F
5.8%
5.2%
3.5%
4.1%
4.5%
3.9%
4.9%
5.1%
5.4% 5.4% 5.4%
2016
348,525
2017
352,005
2018
353,718
2022 F
361,618
2021 F
359,418
2020 F
357,618
2019 F
354,287
Source: Technomic Estimates, Long-term Forecast Report
The number of limited-service restaurant units in the U.S. has steadily increased by an average
of 0.7% per year since 2016 through 2018. The rate of limited-service restaurant unit growth is not
expected to change significantly, with average growth rates expecting to hover around 0.6% till 2022.
Overall, by 2022, an additional 7,900 restaurant units are expected to operate in this segment.
Limited-Service Restaurants Nominal Growth (%)
Historic and Forcasted Limited-Service Restaurant Units
INDUSTRY STANDARDS
4
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | LIMITED SERVICE LSRQUICKSERVICE
2012 2013 2014 2015 2016 2017 2018 2022 F2021 F2020 F2019 F
5.2%
4.1%
2.3%
2.8%
3.8%
2.9%
4.2%
4.4%
4.6% 4.5% 4.5%
The total number of quick-service restaurant
units increased between 2016 and 2017.
However, the number of units decreased in 2018;
this decline is also expected in 2019 based on
the forecast figures.
2016
304,565
2017
305,595
2018
305,052
2019 F
304,069
The growth rate has since recovered somewhat
in 2018 but has not managed to reach pre-2015
level. Going forward into 2022, the growth rate is
expected to stay relatively constant at about 4.5%.
2022 F $282.5
$234.3
$202.4
2018
2014
Quick-Service Restaurant Sales ($B)
YEARS CAGR %
‘14’18 3.5%
‘18’22 4.8%
‘14’22 4.1%
YEARS CAGR %
‘16’18 0.1%
‘18’19 0.1%
Total Quick-Service Restaurants
Quick-Service Restaurants Nominal Growth (%)
QSR’s are a subsegment of LSRs with an average check under $9.50.
WHAT IS A QUICKSERVICE RESTAURANT?
The quick-service restaurant segment, with sales
valued at $234.5B in 2018, forms the largest share
of the limited-service restaurant industry. It has
grown about 3.5% on average between 2014 and
2018 from $204.4B. This segment is expected
to grow at a higher rate of 4.8% on average
between 2018 and 2022 eventually expecting to
reach $282.5B in 2022.
The quick-service restaurant segment has seen
periods of low growth levels between 2012 and 2018,
with growth dipping down to 2.3% in 2013.
INDUSTRY STANDARDS
5
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | LIMITED SERVICE LSRQUICKSERVICE
Source: Technomic Top 500 Chain Report
2014 2018 2022 F
84.1%
15.9%
84.4%
15.6%
84.7%
15.3%
Independents
Chains
LIMITED SERVICE QUICK SERVICE KEY PLAYERS
Chain 2018 Sales ($M) Change % 2018 Units Change % Top 500 Rank
$38,524.1 2.4% 13,914 -0.9% 1
$19,660.0 8.3% 14,606 4.9% 2
$10,410.3 -3.6% 24,798 -4.3% 3
$10,360.8 5.8% 6,588 2.2% 4
$10,180.0 13.5% 2,370 6.5% 5
$9,939.0 3.3% 7,330 1.4% 6
$9,405.0 1.9% 5,810 0.7% 7
$8,786.8 3.9% 9,419 3.0% 8
$6,591.6 11.2% 5,876 5.2% 9
$5,526.6 0.3% 7,482 -0.5% 11
Overall, the quick-service restaurant segment is heavily dominated by chain operators. About 84% of
the total sales in this segment were generated by chain operators (defined as those operators that
appear in Technomic’s top 500 chain restaurant list) with independent quick-service restaurants
taking up 16%. The share of total sales has been relatively stable since 2014 and by 2022, the chain
operators’ share of total sales is only expected to increase by 0.3% from 2018.
Nine of the ten biggest chains in the US all operate in the quick-
service segment. Apart from Subway, the remaining top ten
restaurants all reported positive year-over-year sales. Similarly, except
for Subway, McDonald’s, and Pizza Hut, the remaining top chains also
witnessed an increase in their number of units from 2017.
Looking broadly, over three-quarters of the total sales in the quick-
service segment are made by the top 100 chains in the quick-service
segment, a proportion greater than that of any other restaurant
segments.
Share of Total Sales by Independent vs Chain Operators
INDUSTRY STANDARDS
6
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | LIMITED SERVICE LSRQUICKSERVICE
KEY SEGMENT TRENDS
KEY DECISION MAKERS
ROLE OF EQUIPMENT WITHIN THE SEGMENT
1. Technology plays a huge role in the quick-service restaurant segment and coupled with labor
shortages gives rise to initiatives such as self-ordering kiosks that reduce operators’ reliance on
labor.
2. Efforts to cut down on food waste and improve sustainability continue to be an initiative in the
quick-service restaurant segment, especially with food giants such as McDonald’s targeting to
cut down on its emissions by 2030.
3. Among the quick-service restaurants, healthier and better-for-you options continue to be
influential in driving customer visits and appeal.
4. Off-premise occasions, such as delivery and takeout, continue to grow substantially year-over-
year as more and more restaurant expand their delivery offering or partner with third-party
delivery services.
1. OWNER—Owners of quick-service restaurants (particularly independent QSR operators) have
the most important role in the decision to purchase and repair equipment.
2. DIRECTOR OF OPERATIONS—This role functions prominently in corporately owned and
operated chains. Regional director of operations manages and coordinates the procedures for
maintenance and purchase of equipment.
3. AREA MANAGERS—Within corporately owned or operated chains, the area managers escalate
equipment needs, issues, and concerns to upper management.
4. GENERAL MANAGER—Oversees the day-to-day operations of restaurant stores. May not have a
direct say in the equipment purchase but can escalate equipment related concerns.
1. With the rise of smaller or untraditional floorplans in emerging chains, restaurants may look for
flexibility and accommodation in their food equipment placement for efficiencies.
2. As restaurants continue to struggle with labor shortages, technology and equipment
reducing labor costs will be highly influential in operators’ purchasing decisions. For instance,
multipurpose equipment, such as combi-ovens and conveyor ovens, allowing operators to
streamline the amount of equipment they need which results in fewer employees and less time
spent moving between equipment.
3. Operators in the quick-service segment often face challenges with limited space in their
kitchens. As a result, the use of ventless cooking equipment continues to be used in such area
where ventilation is not ideal, and space is limited.
4. Equipment specific to food waste reduction can help many of the restaurant operators
engaged in food waste reduction and sustainability efforts.
INDUSTRY STANDARDS
7
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | LIMITED SERVICE LSR FAST CASUAL
2012 2013 2014 2015 2016 2017 2018 2022 F2021 F2020 F2019 F
10.1%
11.3%
11.3% 11.6%
8.1%
8.9% 8.3%
8.0%
8.7% 8.9% 8.9%
Fast-Casual restaurants are a subsegment of LSR with an average check of $9.50 or more. They
typically offer premium menu items.
The fast-casual restaurant segment makes up 19% of the total value of the limited-service restaurant
industry. In 2018, the fast-casual restaurant segment’s sales were $55.4B, up from $39.3B in 2014.
During this time period, the fast-casual restaurant segment grew by roughly 9% on average annually.
Looking ahead this segment is expected to reach $77.B in sales by 2022, growing at a relatively
equivalent rate of 8.8% on average annually.
As expected with the pace of growth in
the fast-casual segment, the number of
fast-casual restaurant units have also
consistently increased since 2016. The
annual increase in the number of fast-
casual restaurant units was 5.2% for the
years 2016 and 2018. In total, the number of
fast-casual restaurant units are expected to
increase to just over 50,000 units in 2019.
2022 F $77.5
$55.4
$39.3
2018
2014
Fast-Casual Restaurant Sales ($B)
YEARS CAGR %
‘14’18 9.0%
‘18’22 8.8%
‘14’22 8.9%
2016
43,960
2017
46,410
2018
48,666
2019 F
50,218
YEARS CAGR %
‘16’18 5.2%
‘16’19 4.5%
Total Fast-Casual Restaurants
Fast-Casual Nominal Growth (%)
The fast-casual segment has seen
continuous monumental growth in the
last 7 years. Prior to 2016, the fast-casual
restaurant segment grew in double-digits.
The growth rates dipped since, reaching
their lowest in 2018 at 8%. Looking into 2022,
the growth rates are expected to improve
reaching around 9%.
INDUSTRY STANDARDS
8
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | LIMITED SERVICE LSR FAST CASUAL
Top 100 Chains
All other Chains
& Independents
2018
Top 100
Chains’ Share
of Total Sales
45.4%
54.6%
Like the quick-service restaurant segment, the fast-casual restaurant segment is also heavily
dominated by chain operators. In 2018, the chain operators made up 83% of all the sales in this
segment with independent operators having a lower footprint and amassing about 17% of the sales.
Any change in the makeup of the total share of sales by chain and independent operators has been
negligible. The share of total sales of independent operators is expected to slightly increase by 0.8%
in 2022 from 2018.
2014 2018 2022 F
17.3%
82.7%
16.8%
83.2%
17.6%
82.4%
Independents
Chains
Share of Total Sales by Independent vs Chain Operators
INDUSTRY STANDARDS
9
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | LIMITED SERVICE LSR FAST CASUAL
Source: Technomic Top 500 Chain Report
LIMITED SERVICE RESTAURANTS, FASTCASUAL KEY PLAYERS
Chain 2018 Sales ($M) Change % 2018 Units Change % Top 500 Rank
$5,760.0 4.7% 2,074 1.5% 10
$4,805.0 8.7% 2,452 3.7% 12
$3,523.7 13.1% 2,105 4.7% 21
$2,168.0 0.7% 2,840 3.1% 33
$1,849.0 7.4% 906 3.3% 36
$1,615.8 12.5% 1,358 2.8% 39
$1,207.0 15.3% 1,124 9.4% 45
$1,183.5 22.5% 400 13.6% 46
$1,148.5 17.5% 1,494 11.2% 48
$835.0 1.6% 743 2.3% 55
The following table identifies the key players in the fast-casual segment based on their total U.S.
sales in 2018. These top fast-casual chains are all ranked among the top 60 U.S. chains across all
segments. Additionally, these chains all reported positive increases in year-over-year sales as well as
units.
Moreover, the top 100 fast-casual restaurant chains made just over half of all the sales in this
segment in 2018. The smaller chains as well as the independent operators within the fast-casual
segment have a much larger foothold relative to those in quick-service restaurant segment making
up 45% of all sales.
INDUSTRY STANDARDS
10
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | LIMITED SERVICE LSR FAST CASUAL
KEY SEGMENT TRENDS
KEY DECISION MAKERS
ROLE OF EQUIPMENT WITHIN THE SEGMENT
1. Build your own has been a key driver for fast casual, found especially in segments such as Mexican and
Pizza. This allows consumers the opportunity to customize their own product and creates a point of
differentiation for the fast casual operator.
2. One of the biggest trends in the fast-casual segment is the gravitation towards alternative protein such
as those offered by Beyond Meat and Impossible Foods. An increasing number of fast-casual chains are
adding such alternative proteins to their menus.
3. Fast-casual operators have focused largely on clean-eating initiatives over the past few years, but more
attention will be given to planet-friendly changes such as recyclable takeaway packaging and tableware.
4. Fast casual restaurants have been using bowls to create hearty, filling dishes in unique ways. These include
buddah bowls, ramen bowls, poke bowls, and smoothie bowls.
5. Increasingly, consumers want to know where their food is coming from and the ethical impact it has on the
environment and labor around the world. Fast casual restaurants have been sourcing locally, using organic
and free-trade products in order to appeal to their customers’ sensibilities.
1. OWNER — Owners of fast casual restaurants (particularly independent fast casual operations) have the
most important role in the decision to purchase and repair equipment.
2. DIRECTOR OF OPERATIONS — Function prominently in corporately owned and operated chains. Regional
director of operations manages and coordinates the procedures for maintenance and purchase of
equipment.
3. AREA MANAGERS — Within corporately owned or operated chains, the area managers escalate equipment
needs, issues, and concerns to upper management.
4. GENERAL MANAGER — Oversees the day-to-day operations of restaurant stores. May not have a direct say
in the equipment purchase but can escalate equipment related concerns.
1. The need for speed and creating efficiencies are essential in both the fast-casual as well as the quick-
service restaurant segment. Equipment that will deliver on these may prove to be very attractive to
operators; such equipment can include cooking appliances with automated features such as smart-sensor
technology that can cook quicker and more consistently, equipment that is self-cleaning, and equipment
that can automate washing and cutting of produce.
2. Cutting down on food waste and measures to improve sustainability are being implemented by fast-casual
restaurants. Foodservice equipment such as pulpers, dehydrators, and digesters, along with equipment for
composting can help drive down disposal costs as well as help achieve sustainability goals of operators.
3. As restaurant kitchens have downsized, so has the need for downsized equipment to fit into more compact
spaces emerged. Apart from space-saving equipment, the need for multi-functional equipment has also
emerged; such equipment includes multi-cook ovens that can be programmed to cook four to seven items
at once, all at different temperatures and times.
4. With a focus on “fresh,” refrigeration can play an important role in fast casual, both back of house (where
the need to store larger amounts of fresh food is needed) as well as front of house, where grab n go food
and beverage are popular.
INDUSTRY STANDARDS
11
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR
2018
FSR Sales
$266.7B
Midscale Restaurants
Fine Dining Restaurants
Casual Dining Restaurants
1
7
.
7
%
7
2
%
1
0
.
3
%
The full-service restaurant industry grew by about 3.5%
compounded annually between the years 2014 and 2018.
It is expected to grow at a slightly higher compounded growth
rate at 4.2% annually going into 2022; the total
sales in 2022 are expected to reach $314.1B.
The casual dining restaurant forms the largest
subsegment of the full-service restaurant
industry taking up 72% of all sales in this
segment in 2018.
Midscale restaurants follow suit, making
up around 18% of the total sales.
The fine dining segment, the smallest out
of the three, made up roughly 10% of all full
service restaurant sales in 2018.
Restaurants that offer table service and wait staff are Full Service
Restaurants. Patrons pay after eating in these restaurants. Most offer a
relatively broad menu of meals and snacks for immediate consumption
primarily on-premise, although some may also offer takeout and
catering services.
The full-service restaurant segment was valued at $266.7B in 2018 and
is primarily composed of three subsegments: midscale restaurants,
casual dining restaurants, and fine dining restaurants.
2022 F $314.1
$266.7
$232.4
2018
2014
Full Service Restaurant Sales ($B)
INDUSTRY STANDARDS
12
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR
2012 2013 2014 2015 2016 2017 2018 2022 F2021 F2020 F2019 F
5.5%
3.5%
2.8%
4.5%
3.0%
2.8%
3.4%
3.3%
4.0%
4.5% 4.6%
Historically, the segment has seen modest growth rates, especially compared to the limited-
service segment. Growth peaked at 5.5% in 2015 before dropping down to 2.8% the following year.
Growth rate recovered somewhat in 2018 reaching 3.3%. Looking ahead, the growth rates are
expected to be higher than the current ones.
The full-service segment has seen a steady decline in the number of units between 2016 and 2018;
units decreased by over 5,000 in this period. The number of units are expected to continue declining
into 2022 at a compounded annual rate of 0.7%. This is driven largely by saturation of units in the full
service restaurant industry and a shake-out of under performing operations.
Historic and Forecasted Full Service Restaurant Units
Full Service Restaurants Nominal Growth (%)
2016
357,595
2017
356,790
2018
352,093
2022 F
342,508
2021 F
343,043
2020 F
344,643
2019 F
346,382
YEARS CAGR %
‘16’18 0.8%
‘18’22 0.7%
‘16’22 0.7%
INDUSTRY STANDARDS
13
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR MIDSCALE
Midscale restaurants are a subsegment of FSR with an average check under $12.00. No bar or limited
bar service is typically available.
The midscale restaurant sales were worth $47.2B in 2018, an increase of $5.1B from 2014. During
this period, the segment grew by a compounded annual growth rate of 2.9%. By 2022, sales in this
segment are expected to be around $53.5B, growing at a slightly higher compounded annual growth
rate of 3.2%.
The number of midscale restaurant units
increased between 2016 and 2017 before
declining somewhat in 2018. In 2019, the
number of units are expected to decline
further.
2022 F $53.5
$47.2
$42.1
2018
2014
Midscale Restaurant Sales ($B)
YEARS CAGR %
‘14’18 2.9%
‘18’22 3.2%
‘14’22 3.0%
2016
86,695
2017
86,790
2018
86,738
2019 F
85,998 YEARS CAGR %
‘16’18 0.02%
‘16’19 0.3%
Total Midscale Restaurants
2012 2013 2014 2015 2016 2017 2018 2022 F2021 F2020 F2019 F
2.0%
4.5%
1.0%
3.5%
2.0% 2.3%
2.8%
2.9%
3.3% 3.3% 3.5%
Midscale Restaurants Nominal Growth (%)
Historically, the segment has seen turbulent
growth rates, with growth rates declining to
1% in 2013 before peaking at 4.5% in 2015.
The midscale segment saw another
period of slump in 2016 when growth rates
plummeted to 2%. Since then, the growth
rate has steadily increased to 2.9% in 2018.
Looking ahead, the segment is expected
to recover its growth rate incrementally
reaching 3.5% in 2022.
INDUSTRY STANDARDS
14
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR MIDSCALE
Top 100 Chains
All other Chains
& Independents
2018
Top 100
Chains’ Share
of Total Sales
7
6
.
1
%
2
3
.
9
%
The midscale restaurant segment is largely dominated by independent operators who held nearly
63.8% of all 2018 sales in this segment. The share of total sales held by chain operators was about
36.2% in 2018 and expected to decrease somewhat to 34.4% by 2022.
2014 2018 2022 F
63.5%
36.5%
63.8%
36.2%
65.6%
34.4%
Independents
Chains
Share of Total Sales by Independent vs Chain Operators
INDUSTRY STANDARDS
15
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR MIDSCALE
FULL SERVICE RESTAURANTS, MIDSCALE KEY PLAYERS
Chain 2018 Sales ($M) Change % 2018 Units Change % Top 500 Rank
$3,233.7 3.5% 1,705 2.0% 24
$2,661.9 0.8% 1,578 -1.8% 28
$2,439.4 3.8% 655 1.6% 30
$1,300.0 4.0% 1,936 1.4% 43
$838.0 -6.7% 481 -4.8% 54
$603.0 -3.6% 355 -3.8% 72
$413.0 31.9% 295 21.4% 100
$347.3 -1.6% 209 -1.4% 120
$291.6 15.8% 120 13.2% 134
$275.0 -4.4% 203 -2.9% 139
The table below identifies the key players in the midscale restaurant segment based on their total
U.S. sales in 2018. Most of the top ten midscale chain restaurants reported year-over-year increase in
their sales in 2018. Nevertheless, five of the top ten midscale restaurant chains experienced a decline
in their number of units in 2018. In this segment, the top 100 chains held 23.9% of the segment’s total
sales in 2018.
Source: Technomic Top 500 Chain Report
INDUSTRY STANDARDS
16
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR MIDSCALE
KEY SEGMENT TRENDS
KEY DECISION MAKERS
ROLE OF EQUIPMENT WITHIN THE SEGMENT
1. Kids’ increasingly sophisticated tastes drive menu decisions at family-style dining restaurants. To stay
relevant with today’s kids (and their foodie parents), restaurants are offering options that help kids expand
their palates. An ethnic twist on a classic favorite or a dish of familiar ingredients prepared in a new way can
provide options kids are excited to try.
2. Children—both directly and, in particular, indirectly—strongly influence the decision-making process of
picking a restaurant to eat at. Therefore, a focus on creating a memorable entertainment experience with
games and play areas for kids are helping to keep restaurants top of mind and encourage kids to ask for
repeat visits.
3. Family-style restaurants have been traditionally associated with big plates and huge portions. However, an
increasing number of family-style restaurants are also offering smaller or multiple shareable plates for the
whole table to enjoy.
1. OWNER – Owners of midscale restaurants have the most important role in the decision to purchase and
repair equipment.
2. DIRECTOR OF OPERATIONS – Function prominently in corporately owned and operated chains. Regional
director of operations manages and coordinates the procedures for maintenance and purchase of
equipment.
3. AREA MANAGERS – Within corporately owned or operated chains, the area managers escalate equipment
needs, issues, and concerns to upper management.
4. GENERAL MANAGER – Oversees the day-to-day operations of restaurant stores. May not have a direct say in
the equipment purchase but can escalate equipment related concerns to owner or area manager.
1. As family dining restaurants have varied and extensive menu item offerings, versatility in cooking
equipment is key so that multiple functions can be performed using the same equipment. For instance,
two-sided commercial grills allow the same equipment to produce different items across dayparts.
2. Family dining restaurants have larger portions and coupled with an extensive menu list mean that
operators look for cooking and refrigeration equipment that is tailored to and suitable for a high-volume
kitchen.
3. Family-style restaurant diners looking for healthier options on the kids’ menu can be satisfied by using
equipment such as half-sized convection ovens that cater to a smaller serving size and serve as an
alternative to traditionally deep-fried foods.
INDUSTRY STANDARDS
17
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR CASUAL DINING
2012 2013 2014 2015 2016 2017 2018 2022 F2021 F2020 F2019 F
5.1% 5.5%
3.1% 3.1%
2.8%
3.1% 3.4%
3.2%
4.0%
4.8% 4.9%
2016
252,010
2017
251,115
2018
246,559
2019 F
242,405
Casual dining is defined as a subsegment of FSR with an average check between $12-$50. Full bar
service is typically available.
This segment makes up the largest share of the full-service restaurant segment and amassed $191.9B
worth of sales in 2018. Between 2014 and 2018, the segment grew by a compounded growth rate
of 3.4% annually. By 2022, the segment’s sales are expected to reach $226.9B and the casual dining
segment is expected to grow at a slightly higher compounded growth rate of 4.3% annually.
The number of casual dining restaurant
units have been decreasing from 2016,
with the sharpest decrease in units
occurring in 2018. The total number of
units are expected to continue declining
in 2019. Overall, by 2019, the segment
is expected to lose nearly 10,000 units
compared to 2016.
2022 F $226.9
$191.9
$167.9
2018
2014
Casual Dining Restaurant Sales ($B)
YEARS CAGR %
‘14’18 3.4%
‘18’22 4.3%
‘14’22 3.8%
YEARS CAGR %
‘16’18 1.1%
‘16’19 1.3%
Total Fast-Casual Restaurants
Casual Dining Nominal Growth (%)
Historically, the segment has seen variations
in its growth levels. Growth rate decreased
in 2013 from 5.1% to 3.1% before recovering
back to 5.5% in 2015. Post-2015, the growth
rate declined to 3.2% in 2018. The segment is
expected to grow at an increasing rate from
2018 onwards, with growth rates reaching
4.9% by 2022.
INDUSTRY STANDARDS
18
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR CASUAL DINING
2018
Top 100
Chains’ Share
of Total Sales
2
0
.
4
%
Top 100 Chains
All other Chains
& Independents
Like the midscale restaurant segment, the casual dining restaurant segment is also largely
dominated by independent operators. In 2018, the independently-operated casual dining
restaurants made up 66.3% of the segment’s sales up from 64.1% in 2014. The share of sales by
independent operators is further expected to increase to 68% by 2022.
2014 2018 2022 F
64.1%
35.9%
66.3%
33.7%
68%
32%
Independents
Chains
Share of Total Sales by Independent vs Chain Operators
INDUSTRY STANDARDS
19
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR CASUAL DINING
FULL SERVICE RESTAURANTS, CASUAL DINING KEY PLAYERS
Chain 2018 Sales ($M) Change % 2018 Units Change % Top 500 Rank
$4,211.2 2.3% 1,693 -5.0% 15
$4,082.5 3.7% 855 1.2% 16
$3,795.0 -1.0% 1,208 0.2% 18
$3,500.3 -1.5% 1,251 -0.1% 22
$2,720.0 9.8% 533 4.5% 26
$2,611.7 0.4% 733 -0.9% 29
$2,405.0 -1.2% 678 0.1% 32
$2,127.3 3.4% 201 1.0% 34
$1,754.7 5.0% 520 3.0% 37
$1,506.2 -3.5% 555 1.3% 41
The following casual dining chains have been identified as the key players within this segment
based on their total U.S. sales in 2018. Within the top ten chains, Texas Roadhouse grew its sales in
2018 at a significantly higher rate than other chains, emerging as a growth player in this segment.
Most of the chains reported increases in their year-over-year sales as well as the units in 2018.
The top 100 casual dining chains make up roughly 21% of all sales in this segment, indicating that
most of the segment’s sales are made up by smaller chains and independent operators.
Source: Technomic Top 500 Chain Report
INDUSTRY STANDARDS
20
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR CASUAL DINING
KEY SEGMENT TRENDS
KEY DECISION MAKERS
ROLE OF EQUIPMENT WITHIN THE SEGMENT
1. Large chain accounts have had challenges created a differentiated and unique experience, and chain
growth is well below the growth of the independent casual dining operator. Independents tend to receive
higher ratings from consumers specific to menu appeal, food and beverage quality, and overall ambience
and experience.
2. To appeal to health-conscious guests, expect more casual dining chains to capitalize on growing interest in
functional fare. This could include highlighting antioxidants, vitamins and superfoods to convey meaningful
benefits and natural remedies.
3. Casual-dining chains, particularly those targeting younger consumers, may feel pressure to offer
entertainment options. If brands choose to do so, they may do so in a way that matches a brand’s
positioning, such as family nights at a family-focused concept or sports gambling at a sports concept.
4. Delivery and takeout are trending across the industry and FSRs are trying to adapt. However, off-premise
occasions tend to challenge the typical FSR value proposition highlighting service and ambiance. As a
result, FSRs can be expected to make continued investments in their off-premise programs, including
packaging and digital ordering channels, to improve execution for off-premise orders.
5. Within the casual dining segment, in addition to the traditionally loved and expected fare, the incorporation
of ethnic items and spinning traditional fares with an ethnic flair are also emerging trends, as the segment
moves to accommodate a generation with varying tastes.
1. OWNER—Owners of fast casual restaurants have the most important role in the decision to purchase and
repair equipment..
2. GENERAL MANAGER–Oversees the day-to-day operations of restaurant stores. May not have a direct say in
the equipment purchase but can escalate equipment related concerns to owner or area manager.
3. CHEFS–play a secondary role as influencers; they often won’t make the final decision but can have an
impact on what is being evaluated.
4. OPERATIONS AND FACILITIES MANAGEMENT – often larger chains have facilities or operations teams that
get involved in equipment selection.
1. As casual dining restaurants move to incorporate ethnic fares, the use of specialized equipment–spits, work
ranges, tortilla makers, and chip warming cabinets, will support operators looking to add ethnic menu
items.
2. As casual dining restaurants have varied and extensive menu item offerings, versatility in cooking
equipment is key so that multiple functions can be performed using the same equipment. For instance,
two-sided commercial grills allow the same equipment to produce different items across dayparts.
3. As an increasing number of casual dining restaurants offer delivery, the use of and need for heated holding
cabinets and other heated solutions may become prominent so that casual dining restaurants can ensure
that their food arrives to their customers without loss in quality.
INDUSTRY STANDARDS
21
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR FINE DINING
Fine Dining is a subsegment of FSR with an average check above $50, excluding alcohol.
It is the smallest segment amongst all full service restaurant segments, had $27.6B sales in 2018, an
increase of $5.2B from 2014. Between 2014 and 2018, the segment grew at a compounded growth
rate of 5.4% annually. By 2022, the sales of fine dining segment are expected to increase to $33.6B,
growing at a similar compounded growth rate of 5% annually.
While the segment has been growing,
the number of fine dining units have
steadily declined since 2016. Based on the
forecasted estimates, the segment could
see its largest decrease in the number of
units in 2019.
2022 F $33.6
$27.6
$22.4
2018
2014
Fine Dining Restaurant Sales ($B)
YEARS CAGR %
‘14’18 5.4%
‘18’22 5.0%
‘14’22 5.2%
2016
18,890
2017
18,885
2018
18,796
2019 F
18,429
YEARS CAGR %
‘16’18 0.3%
‘16’19 0.8%
Total Fine Dining Restaurants
2012 2013 2014 2015 2016 2017 2018 2022 F2021 F2020 F2019 F
6.8%
8.1%
6.1% 6.3%
5.1% 4.6%
5.2%
5.0% 5.1% 5.2% 4.9%
Fine Dining Restaurants Nominal Growth (%)
Historically, the segment reached its peak
growth rate in 2015 as well, when the
segment grew by 8.1%. Since then, the
growth rates have faltered to 5% in 2018.
Looking into 2022, the segment is expected
to maintain growing at or around this
rate. The fine dining segment is the fastest
growing full-service restaurant segment.
INDUSTRY STANDARDS
22
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR FINE DINING
Top 100 Chains
All other Chains
& Independents
3
.
9
%
9
6
.
1
%
2018
Top 100
Chains’ Share
of Total Sales
The fine-dining restaurant segment is the most independent-operator dominated segment out
of any restaurant subsegment. In 2018, independent operators made up 85.9% of all sales in this
segment. Moreover, the share of sales made by independent operators has been steadily rising and
is expected to increase by 0.9% by 2022 from its current value.
2014 2018 2022 F
85.0%
15.0%
85.9%
14.1%
86.8%
13.2% Independents
Chains
Share of Total Sales by Independent vs Chain Operators
INDUSTRY STANDARDS
23
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR FINE DINING
FULL SERVICE RESTAURANTS, FINE DINING
Chain 2018 Sales ($M) Change % 2018 Units Change %
Top 500 Rank
$748.4 1.4% 134 0.0% 62
$440.7 4.6% 58 3.6% 92
$304.0 2.4% 70 1.4% 130
$246.0 -0.8% 65 0.0% 149
$230.0 10.2% 17 13.3% 159
$183.0 3.5% 16 23.1% 182
$127.6 9.5% 11 0.0% 244
$121.8 4.1% 15 0.0% 252
$119.8 9.8% 15 7.1% 260
$109.5 12.5% 16 6.7% 281
The following chains emerge as the key players in this segment based on their total U.S. sales in
2018. Reflecting the growth rates of this segment, most of the top ten fine dining chains reported
increases in their year-over-year sales in 2018, with most of them also increasing their number of
units.
The top 100 chains in this segment make up only 3.9% of the total sales in this segment, reflecting
the domination of this segment by smaller chains and especially independent operators.
INDUSTRY STANDARDS
24
// Sales Handbook CONFIDENTIAL! For Internal Use Only. Do not distribute. HB2636 (09-20)
RESTAURANTS | FULL SERVICE FSR FINE DINING
KEY SEGMENT TRENDS
KEY DECISION MAKERS
ROLE OF EQUIPMENT WITHIN THE SEGMENT
1. Multi-sensory dining and chef’s table experiences are predicted to move to the forefront in 2019 as
premium restaurants focus on developing unique experiential offerings. Multisensory dining refers to
the incorporation of ambient sights, sounds, and smells in addition to the food to drive up the overall
experience of diners.
2. Some fine dining restaurants are including elements of socializing and creating larger tables and
welcoming groups during the slower hours of 4 p.m. to 6 p.m. and 10 p.m. to 1 a.m. This also includes a focus
or re-emphasis on the bar, and often includes “bar menus” that include shareables and lower cost items to
drive traffic in this area of the restaurant.
3. Fine dining restaurants are moving away from overly fussy, finicky, and overbearing service to one which
is centered on warmth and genuine hospitality. Overall, the “casualization” of fine dining shows that many
operators are trying to broaden the appeal of these types of restaurants.
4. Emerging fine dining restaurants are leading the charge with more intimate, chef-led fine dining focusing
on creative intimacy.
1. OWNER – Owners of fine dining restaurants have the most important role in the decision to purchase and
repair equipment.
2. GENERAL MANAGER – Oversees the day-to-day operations of restaurants. May not have a direct say in the
equipment purchase but can escalate equipment related concerns to owner or area manager.
3. CHEFS – may play a secondary role as influencers; they often won’t make the final decision but can have an
impact on what is being evaluated. Many fine dining establishments are chef-led and their influence and
role will be more involved in such cases.
1. As many fine-dining restaurants are smaller and/or open for fewer hours than restaurants in other
segments, their cooking equipment needs will not be extensive, as they do not see a high-volume output in
their kitchens.
2. The role of equipment in the fine dining segment goes beyond that in the back-of-the-house. For fine
dining restaurants aiming for a multi-sensory experience, the front-of-the-house equipment plays an
important role to center the various senses of smell and sights and convey their concepts to guests.
3. Larger fine dining restaurants with hundreds of seats per unit are making the use of more compact and
more multipurpose equipment than those traditional fine dining restaurants used 10 years ago for greater
efficiency and flexibility.
