Full Service Restaurant | Limited Service Restaurant
Blurred Segments: Why Brands Need to Break the Rules
5/20/2025
Can the lines between segments get any blurrier? The food industry has been talking about segment blurring—the ever-increasing overlap of offerings between different restaurant segments—for years now. But relentless competition, changing consumer needs, rising prices, and post-pandemic behavior shifts have meant that segments are blurring and blending in new ways. Quick-service operators (QSRs) are upgrading their menus all over again. Fast-casual brands are installing drive-thrus. Full-service restaurants (FSRs) are launching carryout-only bundles. It’s practically the wild wild west out there.
So what does that mean for a restaurant operator? Do you have to be everything to every consumer? No, but you do have to be open to breaking the rules, getting out of your segment’s comfort zone, and learning from what’s working in other segments if you want to succeed. Here are five things you need to know as you consider the path forward:
1. Pricing pressures are collapsing segments
It’s no secret that pricing pressures are creeping up across the industry, but that’s causing many consumers to consider whether they’re getting their money’s worth when eating out. Consider that the average spend at QSRs has increased over $2.00 in just 2 years, from $11.10 in 2022 to $13.30 last year. And they’re spending even more at fast casuals, where the average spend last year was $17.40, up from $14.60 in 2022.1
While prices are rising, QSR consumers, in particular, don’t always think the value is there—the percentage of QSR consumers who say they are satisfied with the overall value at fast food restaurants declined seven points from 2022 to 2023, with only 30% saying the segment is a good value.1
With QSR customers clearly being more sensitive to price changes, the segment should certainly offer deals and streamline menus to focus on popular items in order to maintain the value proposition. But they should also take a page from other segments, upping the quality and freshness of ingredients to compete with fast casuals, and focusing on welcoming dining experiences that rival FSRs, creating a more competitive value proposition overall.
2. On-premise dining is back
Perhaps surprisingly, in-person dining is making a comeback—at limited-service restaurants (LSRs). QSRs, in particular, saw a whopping 10 point increase in only three years—as of 2023, half of all fast food ordering occasions occurred inside the restaurant. And at fast casuals, an impressive 67% of recent orders happened inside the restaurant. Across both segments, ordering and dining inside the restaurant have increased from 2021 to 2023, while off-premise ordering and consumption has declined.1
That’s partly because of changing work policies, with many employers across the U.S. requiring employees to be in the office at least some of the time, if not every day of the week. That opens up an opportunity for LSRs to create better in-person ordering experiences, comfortable dine-in options, and exclusive deals available only to on-site customers to drive more of these occasions.
3. Fast casuals need to get faster
The lines between two segments may not be any blurrier than they are between QSRs and fast casuals—and if consumers have their way, that will only be more true in the future. Consumers already turn to fast casuals for better quality and overall value, but today they also want fast casuals to up their game when it comes to convenience. Consumers today simply don’t like to sacrifice any of their dining wants, which means fast casuals need to deliver fast food-level ease. That means introducing mobile ordering, more efficient pickup options, and drive-thrus.
4. Full-service restaurants embrace off-premise options
Meanwhile, FSRs are grabbing more occasions and increasing revenue by offering more off-premise options (we told you it was the wild wild west out there). And consumers are responding, embracing restaurant-quality food without the wait. How can FSRs respond? To start, they should capitalize on combo meal bundles or pricing promotions, the number one offering that would motivate consumers to purchase more to-go options from FSRs—nearly a third (32%) of consumers were interested, up 13% from 2021.2
And if FSRs are serious about off-premise dining, they should invest in another offering that’s typically associated with QSRs—a drive-thru window. While not commonly associated with sit-down dining destinations, nearly 30% of consumers said a dedicated carry-out window would motivate them to purchase more to-go food from FSRs, a 10-point increase from 2021.2
5. Quality is the great equalizer
It doesn’t matter what segment you are in, food quality matters to consumers. At the end of the day, every consumer simply wants tasty food. At both QSRs and fast casuals, for instance, taste and flavor were the most important factors they considered when visiting, followed by high-quality, fresh food. And at the higher price points associated with LSRs, a higher-quality product is simply a given.
Brands that commit to better sourcing, improved recipes, and a no-compromise commitment to taste and flavor will stand out, no matter the segment.
Indeed, it’s clear that success for restaurants today doesn’t come from fitting neatly into a single box. Instead, it’s about mixing and matching the attributes that make you competitive and that your consumers want—fast food with ambiance, fast casual with speed, full service with off-premise appeal.
So go ahead—break the segment rules and build something better.
1 Technomic Ignite Consumer data
2 Datassential: Off-premise Consumer Preferences, 2024
