In recent years, a noticeable shift has occurred in the fast food and casual restaurant industry, as high-priced establishments have emerged alongside their more affordable counterparts. Projections indicate that this industry will continue to expand, with the fast food market expected to hit a $931.7 billion figure by 2027, growing at a compound annual growth rate (CAGR) of 4.6% from 2020 to 2027. The quick-service restaurant segment reigns supreme, capturing 42.59% of the worldwide fast-food market portion in 2019. It is anticipated to maintain its dominant position throughout the entire forecast period.
The Rise of Expensive Fast Food and Fast Casual Restaurants
The fast food and fast casual sectors, typically known for their quick and affordable meals, are now witnessing the emergence of upscale food joints. This trend reflects changing consumer preferences for elevated dining experiences, healthier ingredients, and premium quality food. Expensive fast food and fast casual restaurants cater to customers seeking convenience without compromising on taste or atmosphere. However, this shift also raises questions about the factors contributing to higher prices within the industry.
As per Pricelisto, fast-food menu prices experienced a substantial jump in 2022, rising by approximately 13%, surpassing the 12% rise in grocery prices during the same period. This increase can be attributed to factors such as inflationary pressures, supply chain disruptions, and consumer preferences shift.
Factors Contributing to High Prices in the Industry
The Consumer Price Index (CPI) witnessed a slight uptick of 0.1% between February 2023 and March 2023, reflecting a modest increase in the overall cost of food. Additionally, compared to March 2022, food prices surged by 8.5%, indicating a notable rise in the cost of food over the past year.
Several key factors contribute to the higher prices observed in expensive fast food and fast casual restaurants; some are discussed below:
Sourcing high-quality ingredients and implementing stringent quality control measures entail additional costs.
Investments in elegant decor, comfortable seating, and trendy ambiance elevate the dining experience.
Labor costs increase due to the need for skilled chefs and attentive service staff.
The incorporation of unique and innovative flavors, as well as customization options, adds value to the overall dining experience.
The Impact of High Prices on the Industry
According to USDA, food prices are expected to rise by approximately 6.5%, falling between 4.9% to 8.2% during 2023. Specifically, prices for food-at-home are projected to increase by 6.6% (with a range of 4.4% to 8.8%), while food-away-from-home prices are anticipated to rise by 8.2% (with a range of 7.3 to 9%).
The industry has experienced positive and negative effects from the surge in expensive fast food and fast casual restaurants. On the one hand, it has brought diversity to the market and opened up new revenue streams. However, the higher pricing may limit accessibility and narrow the customer base. This shift towards premium options also poses challenges for traditional fast food chains. Striking a balance between affordability and premium experiences is crucial for the industry to thrive.
Potential Future Developments and Trends
Looking ahead, several potential developments and trends are expected in the expensive fast food and fast casual restaurant sector. Some of the notable trends in the expensive fast food and fast casual restaurant sector include:
Technological advancements continue revolutionizing the consumer experience: McDonald's Corporation (NYSE:MCD) and Chipotle Mexican Grill, Inc. (NYSE:CMG) utilize sophisticated algorithms and customer data to enhance customer interactions, streamline ordering processes, and create immersive dining experiences.
Personalized ordering through integrated online platforms, mobile apps, and self-service kiosks: Companies like McDonald's Corporation (NYSE:MCD) and Chipotle Mexican Grill, Inc. (NYSE:CMG) have successfully implemented these technologies, along with many others in the industry.
Delivery options/services continue to gain prominence: Majority of the restaurants including McDonald's Corporation (NYSE:MCD) and Chipotle Mexican Grill, Inc. (NYSE:CMG), have increasingly focused on expanding their delivery capabilities. This trend is driven by the growing demand for convenient, on-demand food delivery and the rise of online food delivery platforms.
Sustainability and plant-based options: As environmental concerns and dietary preferences evolve, expensive fast food and fast casual restaurants will prioritize sustainability initiatives and expand their offerings of plant-based and environmentally friendly menu items.
Collaborations with famous brands and celebrity chefs: Expensive fast food and fast casual restaurants will continue to form strategic partnerships with popular brands and renowned chefs to create unique menu items, limited-time collaborations, and exclusive dining experiences. These partnerships aim to attract new customers, create buzz, and elevate the brand image of both the restaurant and the collaborating entity.
10 Most Expensive Fast Food and Fast Casual Restaurants Right Now
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Methodology
To rank the 10 Most Expensive Fast Food and Fast Casual Restaurants Right Now, our methodology involved selecting a diverse range of restaurants based on their industry recognition. To gather accurate pricing data, we utilized Pricelisto, a reliable online platform known for providing up-to-date restaurant pricing information. Based on these findings, we ranked the restaurants in ascending order of average item pricing.
The curated list serves as a valuable reference for consumers and industry professionals interested in understanding current pricing trends in the fast food and fast casual restaurants sector. However, it's important to note that other factors like food quality, customer satisfaction, and brand reputation were not considered in these rankings.
10. Jason’s Deli
Average Item Price: $8.67
Ranking 10th on our roster of upscale dining establishments, Jason's Deli boasts an extensive presence with 250 delis spread across 28 states, as stated on their website. Among the offerings featured on their menu, the pinnacle of indulgence is the 10 Pound Case of Cranberry Walnut Mix, commanding a price tag of $63.79. Conversely, the Ranch is available at a modest $0.76.
Notably, since 2005, Jason's Deli has conscientiously abstained from incorporating processed MSG, high-fructose corn syrup, artificial dyes, colors, and flavors, underscoring their commitment to providing wholesome choices for patrons.
9. Sweetgreen, Inc. (NYSE:SG)
Average Item Price: $8.96
Sweetgreen, Inc. (NYQ:SG), a prominent player in the culinary landscape, maintains an average item price of $8.96. The company's revenue per share stands at $4.45, highlighting its ability to generate substantial income. Sweetgreen, Inc. (NYSE:SG) has experienced an impressive quarterly revenue growth rate of 21.90% year-over-year, indicating its capacity to attract and retain a growing customer base.
With a gross profit of $71.99 million, the company demonstrates a favorable margin, underscoring its profitability and efficient cost management. With robust revenue totaling $492.58 million and a strong gross profit of $71.99 million, Sweetgreen, Inc. (NYSE:SG) showcases its ability to achieve financial success while upholding a commitment to providing wholesome and sustainable dining experiences.
8. Denny’s Corporation (NASDAQ:DENN)
Average Item Price: $9.30
Denny's Corporation (NASDAQ:DENN) is a popular restaurant chain known for its 24/7 operation and American-style diner fare. It offers a diverse menu that includes breakfast, lunch, and dinner options, along with a range of beverages and desserts. Denny's Corporation (NASDAQ:DENN) has achieved a profit margin of 11.35%, indicating its ability to generate good profits from its operations.
The company's EBITDA, as of recent, stands at $80.41 million, reflecting its earnings before interest, taxes, depreciation, and amortization. With a revenue of $470.79 million over the past twelve months, Denny's has demonstrated its ability to generate substantial income. The company employs a workforce of 3,700 full-time employees.
7. Marco’s Pizza
Average Item Price: $9.80
Marco's Pizza, established in Oregon, Ohio in 1978, has become a major player in the pizza industry. With over 1,100 stores across 33 states, according to their website, Marco's Pizza has built a strong presence. The brand is positioned at a higher price point, with an average item price of $9.80. While the cost may be considered expensive compared to some other pizza chains, Marco's Pizza prides itself on delivering a premium dining experience.
With a focus on fresh ingredients, artisanal dough, and a diverse menu, Marco's Pizza has carved out a niche for itself among pizza enthusiasts who are willing to invest in a higher-quality product. Despite the higher price, the brand continues to expand its franchise network and cater to discerning customers seeking a top-tier pizza experience.
6. Zaxby’s
Average Item Price: $10.91
Zaxby's, a renowned casual fast food restaurant, was established in 1990, according to information available on their official website. With nearly 900 locations across the United States, it has become a popular choice for fast food enthusiasts. While Zaxby's is considered one of the more expensive options in this category, its quality and unique offerings justify the higher price point.
The average price of items on the menu is around $10.91, providing customers with a satisfying meal. One notable item is the Traditional Wings Platter, priced at $78.85, which is a favorite among many patrons. With a workforce of 251-500 employees, Zaxby's continues to expand its presence and deliver a distinctive dining experience to its customers.
