Fast Food Chains Cut Into Casual-Dining Market With High-End Offerings at Lower Prices

As if unemployment rates, home foreclosures and the deepening recession weren't enough, the beleaguered casual-dining industry has to fend off new, formidable competition: fast-food chains.

As consumers increasingly trade down to fast food, several players, such as Wendy's and McDonald's, are working to cement their status as value options. But others are going the other way entirely, marketing higher-end offerings designed to lure the Cheesecake Factory and T.G.I. Friday's faithful.

Burger King will begin selling ribs and thicker burgers this summer as a means to attract families to grab dinner on the go and avoid the stove, said Chief Marketing Officer Russ Klein. Pizza Hut is targeting the same demographic with its Tuscani pastas, which feed four, delivered with breadsticks for $12.99.

Darren Tristano, exec VP at Chicago restaurant consultant Technomic, said fast-food chains may in some ways present a real threat to casual dining. "Convenience has always been a factor, so that's a big key,"he said, adding that casual-dining companies have begun to admit that trading down to lower prices is habit-forming. "It's going to be harder to break back into getting consumers to go back to full service,"he said.