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The Chicago Tribune reports on an apparent disparity between what people want from fast food restaurants and what they are willing to pay for.

They want healthier dishes that are better tasting. They do not, however, want to pay higher prices…nor do they want to give the restaurants more time to prepare their food.

This disparity is creating a kind of sea-change in the fast food business, as so-called “fast casual” restaurants emerge, specializing in better tasting, healthier cuisine. Names like Noodles & Company, Corner Bakery, and Panera Bread Co. are becoming emerging powers, responsible for much of the growth taking place in the sluggish fast food business.

That’s not to say only newcomers are exploiting this new market. Existing powers such as Subway, Chili’s and Outback Steakhouse are working to adapt their concepts to this new trend, and even giants like Wendy’s and McDonald’s are working this side of the street. In Wendy’s case, it is offering new alternatives through both new names such as Baja Fresh Mexican Grill and Café Express, as well as through its traditional Wendy’s units.

McDonald’s, on the other hand, which has become the poster child for sluggish sales in part because it is so big it seems to get hurt the most, is expanding concepts like Chipotle Mexican Grill, Boston Market, Donatos Pizzeria and Pret a Manger sandwich shops.

The downside of all this activity, according to the Tribune, is that consumers’ unwillingness to lay out more bread for healthier and better tasting bread means that profitability may be a long way off for this segment of the business.
KC's View:
While many mainstream supermarkets have dismissed meal solutions as a now-dead fad, this new activity suggests that there may be new concepts and approaches that could reignite interest in the meal solutions arena.

Or maybe old ideas. We keep remembering the “Supreme Court” concept that was tested and failed a number of years ago, essentially offering a menu of quick-serve, healthier options within a supermarket’s walls. Clearly there were limitations in how well that concept could work, but suspect that there may be life left in that baby yet.

Beyond that, we think maybe retailers ought to be looking at both the semantic and actual differences between “fast food” and “fast casual” to see what consumers are responding to, and then start incorporating some of those messages into their offerings.

Ironically, as the Tribune was running this story, the Detroit Free Press ran a similar piece about the “Gourmet To Go” trend, which has upscale restaurants like Charlie Trotter’s in Chicago tapping into the take out business in a big way.

These new alternatives are a lot more expensive than Big Macs, and therefore have a longer way to go to profitability, and certainly are unlikely to achieve the kind of visibility that a Chipotle or Corner Bakery might have in years to come. But still, they speak of a new yearning by consumers, and yet more competition for mainstream supermarkets.