Big Restaurant Chain Sales Gains Fall, Says Technomic

The 500 largest restaurant chains in the United States registered a 3.5% annual sales increase in 2013, a significant decline from 4.9% the prior year, according to data published by Technomic, Inc. in its annual reporting on the leading US restaurant organizations. The Chicago-based foodservice consultancy found that systemwide sales grew to an estimated $264 billion in 2013, up more than $8.8 billion over 2012.

"Although we have seen overall growth within the Top 500, the pace has slowed since last year," said Ron Paul, president of Technomic. "Competition for share of stomach is getting more and more challenging. But brands that have found a way to differentiate themselves are gaining market share."

Among limited-service restaurants, the highest growth came from the Asian, bakery cafe and coffee cafe categories. Segment leaders were Panda Express (10.7% sales growth), Panera Bread (+11.8%) and Starbucks (+10.6%). McDonald's, the largest US restaurant chain, saw minimal sales growth of 0.7% in 2013, as it rang up $35.9 billion. Subway continues as the second largest restaurant chain in the nation, followed by Starbucks, Wendy's and Burger King.

As a whole, limited-service restaurants saw a sales bump of 3.9%. Chicken chains, which grew 5.1%, represented another limited-service sub-segment with above-average sales growth. Chick-fil-A grew at a 9.3% clip, with 2013 sales of $5.1 billion, and surpassed KFC as the top chicken chain.

Full-service restaurants experienced a 2.4% sales increase in 2013, a slight decrease over the 2.9% gain registered in 2012. The full-service steak category continued to show healthy growth, with an increase of 6.2%. Gains in the steak category were driven by Texas Roadhouse (11.1%) and LongHorn Steakhouse (12.8%).

Among varied-menu chains, which increased sales by 2.5% overall, category leader Buffalo Wild Wings boosted sales by 12.9%.

More than 67% of the Top 500 restaurant chains posted at least nominal sales increases. Only 156 of the chains suffered sales declines in 2013, compared to 168 in 2012. Both winners and losers appeared in every segment and menu category. These widely mixed results demonstrate the overall competitiveness of the industry and the need for suppliers and operators to carefully identify and focus on the winners.

International performance by the Top 500 restaurant chains continued to outperform domestic growth in 2013. International sales increases (4.4%) outpaced US sales growth (3.5%), while international unit growth was up 9% versus 2.2% for domestic units.

The Technomic Top 500 Chain Restaurant Report provides an exclusive one-year sales forecast by menu category, an update on franchise and international activity, outlook for the future, market share by menu category, newly added key themes, and more.

 

The Five Fastest-Growing Chains with Sales Over $200 Million
Ranked by Percentage Increase in Sales in 2013 vs. 2012
Rank Chain U.S. Sales
($MM)
% Sales
Change
% Unit
Change
1 Dickey´s Barbecue Pit *331 32.9 29.8
2 Smashburger 215 32.0 29.0
3 Raising Cane´s Chicken Fingers *321 23.6 18.0
4 Marco´s Pizza *234 22.6 27.5
5 Jersey Mike´s Subs 406 21.2 22.1

 

The Five Fastest-Growing Chains with Sales Under $200 Million
Ranked by Percentage Increase in Sales in 2013 vs. 2012
Rank Chain U.S. Sales
($MM)
% Sales
Change
% Unit
Change
1 BurgerFi *45 178.1 175.0
2 Del Frisco´s Grille 44 83.9 120.0
3 Twin Peaks 165 68.4 64.3
4 Cherry Berry *62 63.2 42.7
5 Orange Leaf Frozen Yogurt *114 48.6 38.2
* Technomic estimate