Fast-casual restaurants gobble up market share

Fast-casual restaurants like Chipotle and Panera are just a slice of the restaurant market, but they are steadily building a following among customers looking for better quality and moderate prices.

Fast-food eateries are in the throes of drive-through Darwinism as more upscale upstarts, such as Chipotle Mexican Grill and Panera Bread Co., grab market share from the likes of Taco Bell, Subway and Wendy's.

Chains that are fancier than fast-food options but cheaper than sit-down alternatives are part of a hybrid sector known as fast-casual that is maturing into one of the food industry's strongest.

That category is tapping into growing demand for more healthful, specialty foods that are still speedily served and moderately priced. Fast-casual is steadily poaching fast-food customers looking for better quality and sit-down diners seeking cheaper prices, said NPD analyst Bonnie Riggs.

"There's no end in sight to their growth," Riggs said. "They've delivered on consumers' value expectations far more than most fast-food places."

The evolution is happening as the rest of the restaurant industry fights for a shrinking customer base amid a slow economic recovery and high food prices. Read More

Posted on December 27, 2011 and filed under Fast Casual.