News
Technomic report shows restaurant-growth slowdown
March 2, 2008
CHICAGO — According to data released by Technomic Inc. in its annual reporting on the top U.S. restaurant chains, the 500 largest chains registered slower growth rates in 2007, posting an annual sales-growth rate of 5.1 percent, compared with an annual sales-growth rate of 6.1 percent in 2006.
"As the U.S. economy continued to struggle against rising fuel prices, increasing cost of labor and commodities and menu price increases, the Top 500 restaurant chains' sales growth declined to 5.1 percent, versus 6.1 percent in 2006," said Ron Paul, president of Technomic. "Current economic conditions have caused many chains to scale back their U.S. unit expansion with unit growth rates for 2007 of 2.4 percent compared with 3.8 percent a year ago."
Significant growth for the year continued to come from the limited-service beverage, bakery-café and chicken categories with Starbucks, Panera Bread and Chick-fil-A posting estimated 2007 double-digit sales-growth rates of 21.5, 17.6 and 16.1 percent, respectively. McDonald's grew an estimated 6.1 percent with sales exceeding $28.7 billion. Additionally, Subway dominated the growing "other sandwich" segment with 6.4 percent sales growth and total sales of $8.2 billion.
Limited-service chains within the Technomic Top 500 accounted for more than 80 percent of all U.S. fast-food restaurants. As a whole, this group grew at a rate of 5.4 percent. Asian, which grew at 11.6 percent, was another limited-service subsegment with sales growth above its segment average. Within this segment, California-based Panda Express grew 15.1 percent with estimated sales of more than $1 billion.
Growth continued to be driven by fast-casual chains. The Mexican category was led by Qdoba Mexican Grill and Chipotle Mexican Grill, which posted an estimated U.S. systemwide sales growth of 42.9 and 26.2 percent, respectively. The Asian category continued its sales growth with P.F. Chang's Pei Wei concept (16.8 percent) and Panda Express (15.1 percent). Standouts in the chicken segment included Zaxby's and El Pollo Loco with estimated sales growth of 21.1 and 16.6 percent, respectively.
The 10 fastest-growing chains with sales of more than $200 million ranked by percentage increase in sales in 2007 vs. 2006 are:
- Qdoba Mexican Grill with $380 million in sales in 2007, a 43-percent change from 2006.
- Jimmy John's Gourmet Sandwich Shop with $348 million in sales in 2007, a 33-percent change from 2006.
- BJ's Restaurant & Brewery with $319 million in sales in 2007, a 32-percent change from 2006.
- Chipotle Mexican Grill with $1 billion in sales in 2007, a 26-percent change from 2006.
- Fleming's Prime Steakhouse & Wine Bar with $250 million in sales in 2007, a 25-percent change from 2006.
- Bonefish Grill with $406 million in sales in 2007, a 24-percent change from 2006.
- Moe's Southwest Grill with $336 million in sales in 2007, a 23-percent change from 2006.
- Starbucks with $8.5 billion in sales in 2007, a 22-percent change from 2006.
- Caribou Coffee with $301 billion in sales in 2007, a 21-percent change from 2006.
- Zaxby's with $563 million in sales in 2007, a 21-percent change from 2006.
In total, the top 10 fastest-growing chains' sales accounted for $12.5 billion, a 23-percent increase over 2006. Unit counts grew 18 percent.
The 2008 Technomic Top 500 Chain Restaurant Report provides Technomic's exclusive five-year sales forecast by menu category, an update on fast casual, five-, 10- and 20-year trend analyses, outlook for the future, market share by menu category and more.
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