Digitization expected to propel the US fast food market to 5.1% growth between 2020 and 2025, says GlobalData

US fast food restaurants have fared better than other restaurant types during the pandemic by effectively embracing digital technology such as online ordering for home delivery and the use of cloud kitchens. According to leading data and analytics company GlobalData, the power of digitization in the US fast food market is expected to deliver a robust compound annual growth rate (CAGR) of 5.1% between 2020 and 2025.

Carmen Bryan, Consumer Analyst at GlobalData comments: “Having come into their own during COVID-driven lockdowns, fast food home delivery and cloud kitchens – which are basically restaurants that operate through delivery only without a physical storefront for dining in or customer collection – are expected to outlive the pandemic. Therefore, investing in digital platforms will enhance a fast food brands’ online presence and customer experience in what will become an increasingly digital world.”

GlobalData’s latest report, ‘Foodservice Market in the United States of America (USA) to 2025 – Market Assessment, Channel Dynamics, Customer Segmentation and Key Players’, reveals that digital technologies are expected to become an integral part of the US fast food market as demand for fast food home deliveries increases due to changing consumer eating habits post COVID-19.

Bryan adds: “Online ordering for delivery, whether via a website or using an app, is very popular among consumers – particularly those who prefer not to dine out due to the pandemic. While delivery companies are a relatively low-cost method for providing delivery services, foodservice operators that can invest in their own delivery services should consider doing so.”

The report also identifies a number of other key consumer insights around US fast food:

  • Nearly two thirds (62%) of frequent visitors* to fast food chains stated that a ‘greater variety of dishes or cuisines available’ was a key factor in deciding to dine out, as opposed to only 49% of non-frequent visitors*
  • A total 36% of US consumers that visit fast food outlets at least once a week highlighted the advantages of having a meal that was good value
  • The majority of US citizens prefer to visit familiar chain brands, as these are perceived to be the safer bet – with more food options and guaranteed high quality for a low price. Chain operators will continue to dominate in the coming years due to this sense of familiarity and quality experience

Bryan adds: “In the long term, given the adverse impact of the pandemic on the operational performance of businesses, investing in technological advancements will help US fast food brands gain an edge. In April 2021, Dominos, in partnership with Nuro, launched its first on-road self-driving pizza delivery vehicle across the US.
Whist this innovative service was one of a kind it was able to offer an exceptional delivery experience to customers through leveraging digital technology and digital solutions like this will become a vital lifeline for the sector going forward.

Frequent visitors refers to visiting fast food outlets at least once a week, non-frequent visitors refers to visiting fast food outlets less than once a week.

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