What's driving the fastest-growing chains?

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The Top 500 chains enjoyed year-over-year growth of 5%, besting the 4.8% gain of the industry overall. Unit growth for the top chains was nearly double that of the industry. What’s fueling that growth? A strong connection with millennial consumers, says Technomic President Darren Tristano. Largely, that means low-touch, high-tech operations and a brand that stands for something. But beyond demographics, there are some other dynamics shaping the growth landscape.

Restaurant chains that experienced a surge in both sales and units in 2015 are hitting on trends that proved to grow sales and traffic.

Expanding dayparts

Breakfast was a big growth area within the Top 500—not only in QSRs such as McDonald’s and Taco Bell, but breakfast-and-lunch-only full-service chains also have been proliferating. 

Nontraditional locations

On the traffic front, chains are adding stores at nontraditional venues, namely malls, airports and college campuses. They’re also looking at smaller storefronts, says Tristano. “With more meals taking place off-premise, there’s less of a demand for in-store dining. Smaller platforms mean lower cost and the ability to expand faster,” he says.

Moving the price of goal posts

The fast-casual market, which has celebrated two decades of double-digit sales growth, is evolving. Its price-point is moving north of $10, says Tristano. That’s left opportunity for splintering within the quick-service segment. “QSR-plus” chains, such as Culver’s, Chick-fil-A and In-N-Out Burger, “are willing to move the needle on quality but remain relatively convenient.” In most cases, drive-thrus still contribute to the ease factor, and price points remain affordable for consumers. Traditional QSRs with lower price points, on the other hand, will continue to win by targeting the range of lower- to middle-income customers and trading on volume, Tristano says. The challenge those chains will face going forward, though, will be difficulty in inching up prices and moving away from discounting.


Biggest sales growth

2016 Rank

Chain Name

Sales Change

Unit Change

385MOD Pizza220.5%196.8%
279Blaze Pizza204.8%108%
264BurgerFi69.3%30.2%
353Pieology Pizzeria67.3%85.7%
280PDQ60.6%51.5%
416Smallcakes Cupcakery and Creamery55%30.7%
174Shake Shack53.6%36.1%
374Freshii48.2%55.6%
296WaBa Grill43%36.9%
139The Habit Burger Grill42.5%29.1%
414Another Broken Egg Cafe40.9%26.8%
306Kneaders Bakery & Cafe40%60.6%
496Rock & Brews39.9%42.9%
92Marco's Pizza34.3%17%
314STK33.4%50%
132Freddy's Frozen Custard & Steakburgers33.1%31.1%
458Sweetgreen32.7%44.4%
500Nando's Peri-Peri32.5%40%
447Mooyah31.4%27.7%
299Del Frisco's Grille30.2%25%

Source: Technomic


Biggest sales decline

2016 Rank

Chain Name

Sales Change

Unit Change

400Blimpie America's Sub Shop-24.5%-24.4%
109Quiznos-23.9%-18%
262Elephant Bar Restaurant-23.7%-3.4%
117Friendly's-19.1%-5.4%
402Black-eyed Pea-18.4%-37.5%
225Coco's Bakery Restaurant-16%-34.9%
151Ryan's-15.2%-26.8%
425CherryBerry-14.9%-18.5%
410Back Yard Burgers-14.5%-9.5%
149Mimi's Café-13.9%-5.6%

Source: Technomic

 

View the full Top 500 report

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