Casual Dining Growth
Between the three years from 2016 to 2019, we estimated the growth rate of the casual dining space in the US at 2.22%. To arrive at his estimated growth rate, we calculated the market size of this space at $78.2 billion in 2016 and $83.53 billion in 2019. However, growth in this space was 3.2% from 2012 to 2016 based on the top 500 chains in the sector. The sector's growth began to dip in 2015 when visits to casual dining restaurants in the US declined by 2%. On the other hand, the casual steakhouses segment in the US witnessed sales growth averaging 0.9% between 2016 and 2017, while the casual dining segments (polished casual and mass casual) declined by -1.9% and -2.3%, respectively.
We started by examining reports by the Nation's Restaurant News, NPD, Restaurant Business Online, and others in search of growth analysis of the casual dining space in the US in the last 2-5 years. This investigation produced reports by Nation's Restaurant News (this and this), which looked like they had data of the US restaurant industry by segments and market share, but they were behind pay-walls, so we could not access them. However, we located a report by USA Today, which revealed the market share of the casual dining sector in the US overall restaurant industry in 2016. Also, we found other reports by HVS, Restaurant Nuts, and others, revealing that the casual dining space in the US declined from 2015. Unfortunately, no reports revealed any market analysis relevant to the growth rate or market size of the casual steakhouses segment in the US.
So, to estimate the market size of the casual dining space from 2016, we investigated market research portals such as Statista, Technavio, Markets & Markets, and others in search of insights into the US overall market size by segments and shares. This time, we located a report by Statista showing the market value of the US restaurant industry in 2016, but there was no info regarding its segments or shares. So, we used the data from Statista and USA Today to estimate the market size of the casual dining space in the US in 2016; then, we proceeded to research how the sector grew from 2016 to 2019. However, there was no market report, surveys, or studies in the public domain with insights into the market share or growth rate of the casual dining space in the US from 2016 to 2019, neither was there any data showing how the sector compared to the steakhouses segment within the same period.
Therefore, we expanded our investigation to examine reports by media and consulting domains such as PwC, McKinsey, Forbes, and others. This investigation revealed a study by PwC showing the growth rate of the casual dining space between 2012 and 2016, and from 2016 to 2017 based on the top 500 chains of the segment. Also, we identified a 2018 report by Restaurant Business Online, showing the expected growth rate in the casual dining space for 2018 and 2019, respectively. Hence, we used the data we found from this investigation, as well as others earlier identified, to estimate the growth rate of the casual dining space in the US from 2016 to 2019.
Regarding the steakhouses segment, based on our investigation of publicly available info, there was no study revealing its market size in the US between 2015 and 2019; neither was there any data in the public domain pertinent to its market share. So, we could not estimate how this segment's market size changed from 2015 to 2019 compared to the casual dining space. However, we located a report by Aaron Allen & Associates, which revealed that while the casual dining space declined in the US, the steakhouses segment of the US overall restaurant industry was growing. Thus, due to the lack of info revealing the market size or market share of the casual steakhouses segment, we provided the information by Aaron Allen & Associates, as a proxy for comparing the casual dining space and the steakhouses segment in the US between 2016 and 2017.
GROWTH ANALYSIS OF THE US CASUAL DINING SPACE
Between 2015 and 2016, visits to casual dining restaurants in the US dipped by 2%. This traffic drop pegged the market share of the casual dining sector of the US restaurant overall industry at 10% in 2016, according to a report by USA Today. Based on Statista's report, the US overall restaurant industry was $782 billion in 2016; so, using the 2016 casual dining data by USA Today, we estimated the casual dining market in the US in 2016 as follows:
Casual dining market size in 2016 = [US overall restaurant market size*10%]
Through 2017, the casual dining sector of the US restaurant industry continued to plunge. A report by HVS in 2017 acknowledged that sales in the casual dining space declined significantly from 2015 to 2016, and up to early 2017, and attributed it to factors such as weather, politics, and other things between these. Restaurant Nuts' report noted that casual dining sales shrank further in 2017, although there were no sales or market share figures released, factors the report observed to be responsible for the decline included the sector's average cost of $14 compared to the fast-casual sector that had an average price of $8. Also, Restaurant Nuts reported that the shrinking middle class, revitalization of city centers, declining shopping malls, millennial preferences, and "chef-driven farm-to-table venues" were responsible for the decline of the casual dining space in the US in 2017.
However, despite dwindling sales in the sector between 2015 and 2016, HVS's report in 2017 observed that the casual dining segment could improve sales by offering innovative menus that met the demand for healthier, providing locally-sourced options; upping overall service delivery; and using technology to automate client-facing processes.
PwC's report in 2018 showed that, although the casual dining space in the US witnessed an average growth rate (CAGR) of 3.2% between 2012 and 2016 for the top 500 chains, the sector only grew by 0.1% through 2017. Thus, using the estimated $78.2 billion value of this space in 2016, we calculated the US casual dining market segment in 2017, as follows:
The estimated casual dining market size in 2016 = $78.2 billion; if the 0.1% growth witnessed by the top 500 chains in this segment represents the entire sector; then, through 2017, the market was valued at [($78.2 billion*0.1%) + $78.2 billion] ~ $78.28 billion.
However, beginning in 2018, the casual dining space in the US began to witness positive growth, as reported by Restaurant Business Online. As per the report, this space grew by 3.2% in 2018 and was expected to grow by 3.4% through 2019. Using this information, we determined the market size of the casual dining space in the United States in 2018, as follows:
The estimated 2017 market size =$78.28 billion. Based on the report that the sector grew by 3.2% in 2018, the estimated market value in 2018 was [($78.28 billion*3.2%) + $78.28 billion] ~ $80.78 billion.
Also, with the industry expected to grow by 3.4% in 2019, the estimated that the market size of the casual dining sector in 2019 would be [($80.78 billion*3.4%) + $80.78 billion] ~ $83.53 billion.
Thus, between the 3 years from 2016 to 2019, the estimated growth rate of the casual dining space is as follows:
- 2016 estimated market size = $78.2 billion
- Calculated market size in 2019 = $83.53 billion
- Then, using the CAGR calculator, we estimated the growth rate of the US casual dining space from 2016 to 2019 at 2.22%.
CASUAL STEAKHOUSES MARKET ANALYSIS
The casual steakhouses segment in the US grew at the same time when the casual dining space was declining, according to a report by Aaron Allen & Associates. As per the report, while several casual dining chains struggled between 2015 through 2017, "casual steakhouses came out on top." Furthermore, during the period when sales in the casual dining space declined, most publicly-traded steakhouses escaped the declining same-store sales during the first quarter of 2017. In short, Aaron Allen & Associates' report noted that "steakhouse restaurant sales were largely positive" even as sales in the casual dining space plunged, which pushed up to seven steakhouses in the US to be among the 50 emerging brands, as of the report in 2018.
Aaron Allen & Associates' report also observed that, while the casual dining segments (polished casual and mass casual) declined by -1.9% and -2.3%, respectively, steakhouses grew at an average of +0.9%, as of the first quarter of 2017, which indicated that this sector grew in 2016, as well. Unfortunately, there was no report in the public domain with analytical insights into the overall growth of the steakhouses segment of the US restaurant industry relevant to its market size or market shares.