Is it quick or fast?

Fast casual restaurant is an upcoming format filling in the space betweean fast food and casual dining. On other hand, Quick Service Restaurants (QSR) is one of the fastest growing segments within the food service sector, which is pegged at `7,500 crore and growing at a rate of 27-30 per cent. Both the segments have potentials and characteristics of their own. Let’s see what separate these two formats from one another and which will strive to overpower the other.

There is a thin line that separates the two from each other. While at a typical QSR, you are served on the go for a fixed menu at a lower price point; at a fast casual you are given the option to choose from a varied menu for fresh meals, offering a better ambience than a QSR, but may not necessarily be a full service format. Agreeing, Suhani Mehta, Director, Orange Tomato says, “QSR has limited or no seating space. It is meant to serve someone on the go. Most QSR restaurants have food which can be carried in one hand and eaten, such as burgers, tacos, rolls, pizzas, etc. A fast casual restaurant offers you the option to sit and have your meal. The menu is more elaborate than a QSR themed restaurant. The pricing is also marginally higher.” Adding to this Kiran Nadkarni, CEO, Kaati Zone, reiterates, “QSR concepts are functional, offering food at value-for-money price points. Fast casual concept is more upscale compared to QSR.”

What’s in the menu?

As assembly of the food items is what QSRs are about, fast casual restaurants involve cooking from a scratch. Manu Mohindra, Managing Director, Under One Roof says, “The beverage offerings in a QSR format are limited with most products being pre-packaged. The fast casual restaurant has a larger beverage selection and can offer fresh products like juices and smoothies which are prepared from fresh ingredients on site.”

Service matters

The obvious difference in the formats is that at a QSR, you have to queue up to order and carry the food off the shelf yourself as compared to being served on the table at a fast casual restaurant.The speed of service will be faster at a QSR when compared to the service time at a fast casual restaurant. Nadkarni says, “Fast causal stores may have a larger kitchen area for food preparation.”

The average time spent at a QSR is about 12 minutes while at a fast casual restaurant, it is about 25 minutes. Mohindra says, “The QSR, depending on its service mode, would be brisk operations with greater emphasis on turnaround time and reducing waiting time in guest queues. The fast casual restaurant has a higher emphasis on floor management, table service and quick pick up of food from the kitchen.” 

What happens at the back?

Logistics and supply chain variations may take place depending on the raw materials being transported for the formats. Nadkarni tells, “QSRs may follow a frozen supply chain, whereas a fast casual may have more food preparation on-site.” Processed foods offer a level of ease for most of the QSRs which thrive on frozen foods. For a fast casual restaurant, ordering and replenishments need to be managed more often. Mehta says, “Inventory management is extremely important in both formats, however, it is easier to manage inventory for a QSR.”

The cost involved in back end operations also varies in both the formats. Mohindra says, “For a new QSR being set up, the back end operations are more capital intensive and require the logistics and supply chain angle to be sorted out prior to setting up of the store.”

 Pricing: a thin line difference

Pricing is stiff owing to competition and is lower for a QSR. Since fast casual restaurants fall in between QSRs and casual dining restaurants, they are even priced the same way. Prices are usually more stable in a QSR format. Mohindra informs, “QSR ticket sizes range from `175-225, while a fast casual restaurant commands a higher ticket price at approximately `250-325.”

The growth prospect

Since QSRs have been present for a longer time, they have made greater room for themselves. Tapan Vaidya, General Manager- Restaurant Division, The Jawad Business Group, UAE says, “QSRs can definitely be scaled up big time in India. Indians are price sensitive and lower the price, higher will be the sales.  Even if one has to take a little hit in the margins, the restaurateur should go ahead as the brand needs sales. One should price against value that is being offered. Therefore, QSRs have a greater chance of success. Over time, fast casual may have that kind of appeal for the Indian consumers, but ultimately the price will decide whether it can be scaled up as much as a QSR.”

 When looking for locations for opening a restaurant, malls and high streets are apt. What needs to be looked at are the financials and feasibility of the locations. Mohindra says, “The QSRs needs to do multiple locations within a certain geographical area to justify its capital cost on establishment. The fast casual restaurant has to carefully assess its catchment area to minimise overlaps before choosing multiple locations within the same city.”  

For tier I and II cities, the first preference is service which points towards probably a better scope for fast casual restaurants. For QSRs, it may be a hit as for a consumer, pricing is the last factor they keep in mind when eating out today. In fact, even in tier III cities service is slowly and gradually overpowering the price factor.

Franchising paves the way for taking both the businesses forward and aiding them to expand swiftly.

Customer preference

Looking at the larger picture, there are immense opportunities for both the businesses to co-exist. One may take lead ahead of the other but the market will facilitate the growth of both these formats.             

 

 

 

 

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