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Fast casual heats up restaurant industry with 11 percent growth

More QSRs and full-service restaurants are expected to realign their formats to compete more aggressively.

Fast casual heats up restaurant industry with 11 percent growth

| by Alicia Kelso — Editor,

The honeymoon phase seems far from over for the fast casual segment, judging by Technomic's newly released 2014 Top 500 Chain Restaurants report.

According to the market research firm, the segment grew sales by 11 percent in 2013, and unit count by nearly 8 percent. The largest fast casual concepts — Panera, Chipotle and Panda Express — each generated strong sales gains as well, of 12, 17 and 11 percent, respectively.

Technomic's report said drivers of fast casual's growth include "better-than-quick-service food," ambiance and "fresh, made for you" appeal.

"Watch for even more menu and concept diversity in this sector," EVP Darren Tristano said in a release. "Also look for more quick-service restaurants and full-service restaurants to realign their formats and develop new fast casual concepts to compete more aggressively."

That's already happened with Taco Bell, which is launching the U.S. Taco Co. and Urban Taproom in California.

Also, its sister brand KFC spun off KFC eleven in Louisville, Ky., last summer. Parent company Yum! Brands is also testing Super Chix "better chicken" concept in Texas.

Applebee's is trialing an express lunch service in Kansas City, Mo., modeled after the segment.  While Red Lobster has also experimented with the idea, with its Seaside Express concept in Florida.

Top 50 dominated by fast casual

The 50 fastest growing chains in the Technomic Top 500 were led by better burger concept BurgerFi, which increased U.S. systemwide sales by 178 percent, to $44.5M, and unit count by 175 percent, to 33 units.

The rest of the top 20 was dominated by fast casual concepts as well, with some casual, quick-service and pizza concepts sprinkled throughout. They include:

  • Del Frisco's Grill, 83.9 percent in sales; 120 percent in units;
  • Twin Peaks, 68.4 percent; 64.3 percent;
  • CherryBerry, 63.2 percent; 42.7 percent;
  • Orange Leaf Frozen Yogurt, 48.6 percent; 38.2 percent;
  • Hot Head Burritos, 48.2 percent; 26.2 percent;
  • Lime Fresh Mexican Grill, 47.2 percent; 22.7 percent;
  • Mooyah, 42.7 percent; 19.1 percent;
  • Freddy's Frozen Custard & Steakburgers, 41.8 percent; 25.3 percent;
  • Shake Shack, 40 percent; 61.5 percent;
  • Nothing Bundt Cakes, 39.5 percent; 30.2 percent;
  • The Egg & I Breakfast & Lunch, 38.2 percent; 31.9 percent;
  • sweetFrog, 37.2 percent; 65.8 percent;
  • Zoes Kitchen, 36.5 percent; 40 percent;
  • Kneaders Bakery & Café, 36.2 percent; 28.6 percent;
  • The Habit Burger Grill, 34.5 percent; 34. 9 percent;
  • Marlow's Tavern, 34 percent; 18.2 percent;
  • Burtons Grill, 33.3 percent; 0.0 percent;
  • Chop't Creative Salad Company, 33.3 percent; 26.3 percent;
  • Dickey's Barbecue Pit, 32.9 percent; 26.3 percent.

Marco's grows sales by nearly 23 percent

Pizza concepts in the top 50 include Marco's Pizza (No. 38), which grew its sales by 22.6 percent year over year in 2013, to $233.5M. The brand's footprint increased by 422 units last year, or 27.5 percent.

Anthony's Coal Fired Pizza (No. 48) grew sales by 19.2 percent, to $63.2M, and units by 19.4 percent, to 43.

Pizza Hut remains the top pizza brand for generating sales, with $5.7B in 2013, which was flat year over year. Number two was Domino's at $3.8B (up 8.6 percent), followed by Little Caesars at $3.0B (up 4.3 percent), Papa John's, at $2.48B (up 4.2 percent), and Papa Murphy's, at $779M (up 6.3 percent).

Other sales and unit growth stories

McDonald's remained the top overall chain by sales, generating $35.8B in 2013, a 0.7 percent increase from the prior year.

Subway remained the largest chain by footprint (and No. 2 in sales with $12.7B), with 26,427 U.S. units, a 3.4 percent increase.

By sales, the rest of the top 10 are:

  • Starbucks, $11.7B
  • Wendy's, $8.7B
  • Burger King, $8.5B
  • Taco Bell, $7.8B
  • Dunkin' Donuts, $6.7B
  • Pizza Hut, $5.7B
  • Chick-fil-A, $5B
  • Applebees, $4.5B

KFC fell out of the top 10 (at No. 11) after its sales dropped by 6.7 percent year over year.

In the top 100, limited-service concepts with double-digit unit growth in 2013 included:

  • Chipotle (10.8 percent, to 1,399 units)
  • Buffalo Wild Wings (10.6 percent to 884 units)
  • Jimmy John's (15.5 percent, to 1,560 units)
  • Wingstop (11.3 percent, to 533 units)
  • Firehouse Subs (25.3 percent, to 576 units)
  • Checkers Drive-In (10.7 percent, to 450 units)
  • Noodles & Co. (16.2 percent, to 327 units)
  • And Jersey Mike's Subs (22.1 percent, to 584 units)

Quiznos, which is currently embroiled in a bankruptcy process, closed 27.4 percent of its system, falling from 1,935 units to 1,404 in 2013.

CiCi's Pizza also shrunk by double digits — 13.3 percent, from about 550 restaurants to 477, according to the report.

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Alicia Kelso

Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine.

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