Full Service to Quick Service: Understanding the Restaurant Industry Shift

As full-service restaurants rapidly shift to quick-service models, businesses that serve them use targeted data intelligence to seize opportunities to adjust sales, align products, and explore emerging brands.

The restaurant industry is undergoing a major shift from full-service to quick-service models. COVID-19 accelerated this trend, but the movement from expensive, sit-down restaurants to cheaper, faster options continues. In 2022, new and existing restaurants began pivoting their business plans to focus more on convenience, speed, and affordability to cater to changing consumer preferences.

Specifically, the insight uncovered by our data team at Tarci shows that since January 2023, quick-service restaurant openings have surged 32%, while full-service establishments have grown only 7% in the same period.

This data signals a clear, ongoing switch to quick-service restaurants in the food industry. Companies that work with restaurants should understand when and how this shift is happening to best market and provide functional solutions.

But first, let’s look closely at the restaurant industry shift trend.

What Trend is Driving the Shift?

Three trends have led to a shift from full-service to quick-service restaurants: economic volatility, COVID-19 safety concerns, and the popularity of convenience. Customers want reliable, efficient, and safe dining options, so restaurants are offering faster, simpler counter-service options.


Uncertainty in Consumer Spending Driving Downsizing

Even before the pandemic, volatility had begun impacting consumer budgets and discretionary spending habits. Unpredictable customer spending has made it difficult for restaurants that rely on consistent foot traffic and average check sizes to depend on elaborate dining experiences each quarter.

Though economists do not currently predict a recession, today’s up-and-down income landscape has nonetheless spurred shifts. As an example, Statista data shows over $320 billion spent in quick service restaurant sectors in 2022. This data shows a clear year-over-year increase, even amidst inflation and broader economic swings.

Conversely, full-service establishments have struggled to attract customers willing to pay premium prices when disposable funds rise and fall so frequently. Restaurateurs are less likely to take risks during uncertain times. For example, rely on $10-15 counter service models rather than $40-60 plate prices.


Pandemic Conditions Spotlight Safety Advantages

The public health crisis introduced unexpected and urgent restaurant changes – though not all negative from a business operations standpoint. COVID brought mainstream attention to preexisting quick service safety attributes that customers now demand persist even after lockdowns lifted.

During the pandemic, counter-service models were ideal for social distancing due to their low-contact nature. Research by the National Restaurant Association says 54% of adults still consider take-out or delivery food essential, including 72% of millennials and 66% of Gen Z adults, even two years later.

Essentially, COVID-19 precautions like face masks, mobile ordering, and grab-and-go formats are now industry norms. Full-service restaurants struggle to compete with these expectations. Offering pandemic-friendly options protects their reputation.


Preexisting Traction of Convenience Models

Pre-COVID, quick-service restaurants capitalized on customers’ desire for speed and convenience, offering consistent menus and quick, flexible ordering through drive-thrus and kiosks. These advantages were perfected through efficient operational formats.

The pandemic accelerated the adoption of such convenience-centered business models and platforms. With convenience definitively in the mainstream, full-service restaurants now face increasing pressure to streamline, limit menus, and implement quick service hallmarks to remain competitive.

What Are The Implications and Opportunities?

What does this shift mean for restaurants and the companies selling to them? Plenty.

Changing service models creates big chances and challenges. Restaurants must update operations to meet new customer expectations. Suppliers need to adjust sales tactics to changed industries and food delivery companies now have a huge potential to tap into. There are hurdles but also openings for growth by leaning into convenience demands.

Meet Restaurant Needs Precisely

As the restaurant industry shifts toward quick service models, your opportunities as a supplier expand by helping restaurants upgrade their capabilities. Many full-service establishments adding counter service or drive-thru face pressing needs like

  • new hardware installation
  • improving kitchen speeds and new hires
  • balancing dine-in and to-go packaging logistics, and
  • distribution channels

This is where leveraging intelligence on specific SMBs proves invaluable. Detailed data identifying full-service restaurants primed for quick-service expansion allows you to prioritize local upgrade projects based on precise transition timelines.

  1. As a food delivery company, you can add these restaurants to your service
  2. As a kitchen equipment provider, you can target sales outreach to restaurants poised for menu changes
  3. Architectural contractors can seize opportunities around building redesigns for pick-up counters
  4. POS partners can highlight modular features to split guest orders across channels

You can do more than just change how restaurants operate. You can help your clients meet new customer demands in the fast-growing quick-service industry and form partnerships by being smart about this shift.

Realign Sales Strategies to New Models

With full-service restaurants adding counter service, drive-thrus, and other quick service elements, your sales approach as a supplier requires realignment. You should update your lead generation strategies to capitalize on these changes.

Expanding prospecting to include hybrid brands is vital now. Adjust branding and marketing content to showcase support for takeout, delivery, and leaner kitchen footprints if you previously targeted only full-service venues.

Your value propositions should start emphasizing flexibility to capture restructuring restaurants as they balance business plans across economic uncertainty.

Products Aligned to Fresh Demands

Simpler menus, smaller footprints, and more reliance on take-out and delivery are guiding product development and market positioning. As a distributor, you could focus on durable, tamper-proof transport packaging.

If you are a smallware company, you can customize recyclable, disposable containers that combine dine-in and to-go usability. There is a need for compact cooking equipment that optimizes limited kitchen space amidst parallel dine-in and pick-up flows.

Explore New Virtual and Delivery Models

Currently, the most common strategy for restaurant transitions is to add counter-service elements. However, many brands are also considering more advanced approaches, such as ghost kitchens focusing solely on take-out or delivery without dining rooms or virtual restaurant concepts operating out of an existing kitchen.

These emerging models that are focused on delivery aim to maximize off-premise capabilities from order management to courier partnerships. Having prior experience in this area can offer advantages in what could potentially disrupt the industry in the future.

Many restaurants are currently exploring various non-traditional methods to determine the best option for their available resources. Focusing your business around the specific requirements of virtual kitchens and off-site ordering is an excellent chance to build a strong brand identity in any industry that serves restaurants.

Now Comes the Power of Data

Now that you understand the implications and opportunities of this industry shift, the next step is identifying which specific restaurants in your region are primed for quick service expansion. Getting insight into individual SMBs in transition allows you to proactively offer the tailored products and services discussed. This is where leveraging intelligence from Tarci, the leading continuous intelligence platform for SMBs, fuels your business growth.

Granular Data on Individual SMBs

Tarci’s platform centralizes both high-level trend data on the restaurant industry along with drill-downs on individual establishments changing in each area. Direct visibility, which shows which specific full-service restaurants show transition signals, allows you to prioritize outreach.

Actionable Operational Insights

In addition to tracking model shift indicators, Tarci gathers on-going operational details like sofrware changes, licenses and staffing dynamics. This empowers you to match commercial kitchen equipment upgrades or POS add-ons to actual restaurant transition plans.

Tailored Partnership Opportunities

Combining industry trends, individual SMB intelligence, and operational specifics enables you to identify partnership opportunities that meet emerging client needs directly. By working with Tarci data, you will be equipped with the granular data you need to successfully adjust your product bundles, services catalog, and sales approach, which becomes far easier when fueled by rich, accurate SMB data.

Let Tarci empower your business growth. Request a demo today.

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