Saturday, November 18, 2017
Business

Fast-casual restaurants gobbling up Tampa Bay market

RECOMMENDED READING


They don't serve food in a sack from a drive-through window.

They also don't have waiters taking orders and delivering dishes tableside.

"Fast-casual'' restaurants fill a niche between fast-food and casual dining. Customers order at a counter, and an employee brings their meals to a table. Guests aren't expected to leave tips.

Nationwide, fast-casual restaurants reflect the fast-growing segment of the food service industry, generating $27 billion in sales last year. Here in the Tampa Bay area, a well-established testing ground for chains, diners eat them up.

"That's where all the action is right now,'' said Nick Vojnovic, president of Little Greek Restaurant chain. "Americans are getting more sophisticated in their tastes and demanding higher quality products. But the young generation is accustomed to getting things at a faster pace.''

The Tampa-based chain is a poster child for the fast-casual trend largely associated with Panera Bread, Chipotle and Five Guys. Little Greek has grown from four stores about a year ago to eight in the Tampa Bay area and one in Dallas. And it's just getting going. Vojnovic, who serves on the National Restaurant Association's fast-casual steering committee, envisions 25 locations in five years and 100 within a decade.

The fast-casual sector has grown about 10 percent a year for the past decade, said Darren Tristano, executive vice president of Technomic, a food industry research and consulting firm. That compares with a 3.5 percent to 4 percent annual gain for fast-food chains and 1.5 percent for casual chains such as Chili's and Applebee's. Fine dining restaurants remain flat.

"Fast-casual operators continue to outshine every other segment,'' he said. "People want fast, fresh, quality meals at a fair price point. This segment seems to hit that sweet spot right now.''

• • •

The restaurants attract families and professionals who have cut back on eating out during the recession. They may be tired of cooking at home and figure that fast-casual doesn't cost much more than buying groceries, given today's rising food costs.

Fast-casual draws more affluent, well-educated customers who are pressed for time but want healthy options. They enjoy lunch and dinner rushes and get more catering business than most restaurants. Meals run $8 to $10 — again about midpoint between fast-food and casual restaurants.

The fast-casual phenomenon has been around for a while but has become a hot topic among area commercial developers and entrepreneurs looking for a post-recession jumpstart. Chipotle, Genghis Grill, Pei Wei and Tijuana Flats had strong presences at the International Council of Shopping Centers' conference Aug. 19-21 in Orlando, fielding inquiries from developers looking for fast-casual brands for their retail centers. In a speech to the membership, Lee Arnold, chief executive officer of Colliers International Tampa Bay, described fast-casuals as the main driver of growth in the Tampa Bay market.

• • •

That comes as no surprise to industry leaders. The Tampa Bay area has long been a testing ground for restaurant concepts, having birthed major chains such as Hooters, Beef 'O' Brady's and, most notably, Outback Steakhouse.

Outback began in 1988 with a single restaurant in Tampa and has expanded to include Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse & Wine Bar and Roy's. Now operated as Bloomin' Brands, the company has more than 1,400 restaurants worldwide.

Many Outback alumni have gone on to pursue other dining ventures, some of them fast-casual concepts such the Red Elephant Cafe and PDQ, a more upscale version of Chick-fil-A.

"There is such great talent here,'' said Jim Kovacs, managing director of retail services for Colliers International Tampa Bay. "All the people who came up from the Outback concepts, they have learned from the best and they are out with their own ideas.''

Kovacs represents retailers and restaurants looking for space. Shopping centers are clamoring for fast-casual concepts, but suitable sites are in short supply, he said. Everyone wants newer, attractive centers and corner spots that generate high traffic.

"These little restaurants are acting as junior anchors. They bring people to the centers,'' he said.

• • •

The Tampa area also excels as a chain incubator because of its diversity in terms of age, ethnicity and income level, experts say. People here on vacation who try a new restaurant often become brand ambassadors when the chain reaches their hometown. Some go on to open franchises in their own areas or return to retire in the Sunshine State.

The fast-casual segment can prove a tasty option for an entrepreneur who may not be able to secure credit for a full-scale restaurant with more expensive furnishings and a larger staff. Tristano, of Technomic, estimates opening a fast-casual restaurant costs about $350,000 and generates $1.1 million a year in sales. Based on an average profit margin of 20 percent, he said, an owner could potentially pay off a restaurant in just a couple of years.

Tristano expects the fast-casual boom will continue for the next decade as existing restaurants expand and new concepts enter the market. He also foresees more fast-food and casual dining spots developing their own fast-casual concepts, like IHOP Express stores and Pizzeria Uno's Uno Due Go.

• • •

Genghis Grill, a build-your-own Mongolian barbecue based in Dallas, opened its first Tampa-area location in December and has plans for five to seven more, including one opening in Carrollwood in November.

Local franchisee Jordan Dorsch of JNE Mongolian LLC said the Brandon restaurant has been well-received and sales are exceeding expectations. Customers like the healthy vegetable options, the open-style cooking area and the price — about $10 per person.

Dorsch is bullish about the fast-casual concept and his plans for expansion. Genghis Grill even dubbed a word for growing its brand. It's called "khanquering'' the market.

Comments
Florida jobs recover from Irma, unemployment rate drops

Florida jobs recover from Irma, unemployment rate drops

As economists predicted, the tough hit that Florida jobs took from Hurricane Irma was not long-lived. The state added 125,300 jobs in October, almost breaking even from the 127,400 jobs it lost in September. According to state figures released Friday...
Updated: 6 hours ago
Apple will postpone release of  HomePod

Apple will postpone release of HomePod

The Washington PostApple said Friday that it’s pushing back its plans for a Siri-powered smart speaker until sometime early next year.The HomePod speaker was announced in June, with an initial launch date set for December. Apple said that its smart s...
Updated: 6 hours ago
HSN, Good Housekeeping pick five contest finalists

HSN, Good Housekeeping pick five contest finalists

ST. PETERSBURG — Good Housekeeping and St. Petersburg-based HSN have chosen five finalists for their entrepreneur competition. The partners are searching for a novel item to promote as endorsed by the Good Housekeeping Seal, denoting reliability and ...
Updated: 10 hours ago
Trigaux: State of Tampa Bay startups? Disconnected we falter but there’s a plan to fix that

Trigaux: State of Tampa Bay startups? Disconnected we falter but there’s a plan to fix that

How are we doing?That was the Big Question posed more than once this past week in Tampa Bay. First, the Tampa Bay Partnership and USF debuted in-depth and new ways to measure Tampa Bay across a wide range of indicators to gauge whether we are gaining...
Updated: 11 hours ago
Tesla’s latest creation: An electric big rig that can travel 500 miles on a single charge

Tesla’s latest creation: An electric big rig that can travel 500 miles on a single charge

The main course was expected: a pair of sleek silver Tesla semi-trucks that get 500 miles per charge, go from zero to 60 mph in five seconds and — if the hype is to be believed — promise to single-handedly transform the commercial trucking industry.B...
Published: 11/17/17
We ask Tampa Bay startup leaders how best to advance entrepreneurial ecosystem

We ask Tampa Bay startup leaders how best to advance entrepreneurial ecosystem

What one thing could be added to the Tampa Bay startup community to help it grow and prosper?The Tampa Bay Times reached out to these leading area entrepreneurs and startup experts for answers.RELATED COVERAGE: Trigaux: State of Tampa Bay startups? D...
Published: 11/17/17
Before you hit the mall: here are some key holiday shopping hours

Before you hit the mall: here are some key holiday shopping hours

Plotting a shopping strategy for the holiday weekend? Here’s a look at holiday store opening hours for some major retailers:Thanksgiving8 a.m.: Kmart1 p.m.: JCPenney4 p.m.: GameStop5 p.m.: Best Buy, Macy’s, Toys "R" Us, Kohl’s6 p.m.: Old Navy, Target...
Published: 11/17/17
Electric, autonomous vehicles featured at Tampa auto show

Electric, autonomous vehicles featured at Tampa auto show

TAMPA — The two biggest trends in the automotive space are ones you’ve likely heard of: electric vehicles and autonomous cars. Both will feature prominently at the Tampa Bay International Auto Show today through Sunday. The event at the ...
Published: 11/17/17
Developer changes approach as downtown Largo project lags in financing

Developer changes approach as downtown Largo project lags in financing

LARGO — Driving down West Bay Drive, you may notice some changes to downtown Largo.A new 29-unit apartment complex on Ridge Road stands finished and ready for residents. South of the complex, land that was formerly home to a community of rundown cott...
Published: 11/17/17
Want to travel solo? Local enthusiasts share stories, tips for holidays trips

Want to travel solo? Local enthusiasts share stories, tips for holidays trips

Stephanie Maisonneuve visited the walled city of Cartagena, a port city off the Caribbean coast of Colombia. She rode horseback down the city’s cobbled streets clucking past flower-filled balconies and massive, wooden arched doors. The travel enthusi...
Updated: 10 hours ago