Market report: QSR chains feeling heat of gourmet rivals

Gourmet Burger Kitchen - Interior/Lifestyle/Food -  Locations: Wimbledon, London Westfield, Baker Street, Bayswater and London Westfield StratfordGourmet Burger Kitchen - Interior/Lifestyle/Food -  Locations: Wimbledon, London Westfield, Baker Street, Bayswater and London Westfield Stratford

Speedily-served burgers used to be the preserve of kitchens from the likes of McDonald’s, Burger King and other QSRs, but the emergence of gourmet operators has put the cat among the pigeons in recent years. Which way is the trend going? FEJ takes a look.

Almost one in 10 people are shunning fast food restaurants and turning to gourmet burger restaurants instead, as the market for the good, ol’ fashioned hamburger continues to undergo a transformation in the UK.

Rather than the traditional quarter-pounder, many Brits are now looking for a “better burger”, with 7% of those who’ve visited a fast food restaurant in the past three months saying they’ve switched from these restaurants to gourmet burger restaurants, according to a new study published by Mintel.

The figure rises to 12% — more than one in 10 — when you take customers aged between 16 and 34. Although the number of gourmet burger bars is still small, Brits’ hunger for a superior burger, among other factors, is having a positive influence on the overall burger bar market, with sales expected to increase 4.5% to £3.2 billion in 2015 and a growth of 19% predicted between 2015 and 2020 to reach £3.8 billion.

And it seems many are looking to trade up their burger choice at fast food restaurants too, with half (52%) of UK consumers who’ve eaten or bought food from a fast food restaurant during the past three months saying they’d be interested in trying gourmet burgers from fast food chains.

What’s more, 29% of fast food users are interested in burgers from fast food venues containing thicker meat, 26% in a greater selection of burger toppings and 24% in burgers made using more premium bread, according to the report.

Untitled-1While those aged 16-34 are the most inclined to prefer a posher patty, they are also the most likely age group to visit fast food restaurants. Four in five (81%) UK consumers aged 16-34 have eaten in a fast food restaurant in the past three months, compared to the national average of 65%.

Richard Ford, senior food and drink analyst at Mintel, says: “The gourmet burger trend continues seemingly unabated, adding value and interest to the burger market. Gourmet burgers have prospered during the economic downturn through their status as an affordable meal that still offers indulgence.

“The ongoing expansion of ‘better burger’ restaurants continues to add value to the market by encouraging trading up. Offering thicker burgers and a greater range of patty meats should provide burger operators with opportunities to further entice customers and maintain their interest.”

The research also found that consumers are having to wrestle with their own guilt when treating themselves to a burger. Over half (54%) of fast food restaurant users say they are concerned about the amount of fat in burgers and 48% are concerned about the amount of calories in them. In addition, almost a third (31%) of fast food restaurant visitors say concerns about the healthiness of fast food have caused them to limit the amount they eat.

Gourmet burger

Gourmet burger chains are targeting a gap in the market that QSRs have struggled to fill.

Amidst concerns over health, it appears that consumers still see gourmet burgers as a “better-for-you” alternative. Indeed, two in five (39%) fast food restaurant users say that gourmet burgers are healthier than burgers from a fast food restaurant.

However, Mintel’s research shows that bitesize treats may be a winning dish for health-conscious fast food diners. Just 17% of fast food restaurant visitors say they have ordered healthier dishes at a fast food restaurant, but two in five (42%) say they would rather eat a smaller portion of their favourite meal in a fast food restaurant than a reduced calorie version.

“While consumers do not tend to traditionally look to fast food restaurants for healthy dishes, smaller dishes may hold more appeal for diners on those occasions where they are looking to cut down on the amount of calories they consume at these venues,” concludes Ford.

Britain’s £3 billion a year burger market

The burger bar segment has performed well in recent years and is expected to post growth of 4.5% to £3.2 billion in 2015, with 22% growth over 2010-15. Continued innovation in the product offering and store formats should help maintain users’ interest. Meanwhile, the ongoing expansion of ‘better burger’ restaurants is expected to boost value through trading up. Mintel forecasts growth of 19% for the five-year period between 2015 and 2020.

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