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Technomic Research Shows Growth Fastest Among Mexican Fast-Casual Chains

CHICAGO, Ill. (Dec. 7, 2009 - Business Wire)—Nine of the ten fastest growing Mexican limited-service restaurants last year were fast-casual chains, finds foodservice industry consultant Technomic. Fast-casual restaurants provide fresh, innovative food prepared to order in upscale environments with check averages somewhat higher than traditional quick-service, “fast-food” restaurants.

Within the Top 50 limited-service Mexican chains, the fast-casual subsegment grew sales by 11.8 percent to $3.7 billion and units by 6.6 percent to a total of 3,348. In comparison, traditional quick-service chains grew sales a modest 1.8 percent to $7.4 billion and declined in units by -0.4 percent to 7,307 locations.

“Consumer demand for this crossover subsegment is driving its growth,” says Darren Tristano, EVP at Technomic. “Consumers are trading down from more costly casual dining restaurants, finding they can get less-expensive, fresh, high-quality food choices within a comfortable setting at these limited-service establishments.”

The findings are part of a new study, the 2009 Technomic Top 50 Limited-Service Mexican Chains Restaurant Report. Other interesting data include: 

  • The Top 50 limited-service Mexican chains’ sales grew by 5 percent to almost $11.2 billion in 2008, while units increased to 10,655, up 1.7 percent.
  • U.S. systemwide sales for the limited-service Mexican industry increased by 3.6 percent to more that $12 billion, while total units grew by 0.6 percent, down from a three-year high of 3 percent in 2007. Many operators shifted their focus away from expansion and towards creating stronger, more relevant brands that meet the needs of today’s consumers.
  • Taco Bell, Chipotle Mexican Grill and Del Taco led the Top 50 in sales, with $6.2 billion, $1.3 billion and $560 million, respectively, and were unit growth leaders as well.
  • The fast-casual subsegment’s sales leaders were Chipotle Mexican Grill, Qdoba Mexican Grill ($447 million) and Moe’s Southwest Grill ($350 million), with growth rates of 20.7 percent, 17.8 percent and 15.9 percent respectively.
  • California-based quick-service chain Chronic Tacos was the fastest growing chain in terms of percentage of sales and unit growth. Through its value-oriented, made-to-order authentic Mexican offerings, the chain increased sales by 75 percent while doubling its unit count.

The 2009 Technomic Top 50 Limited-Service Mexican Chains Restaurant Report was designed to help restaurant operators and suppliers identify leading chains, analyze their performance in sales and units, and better understand the limited-service Mexican industry’s dynamics and current trends. Comprehensive appendices list the Top 50 LSR Mexican chains alphabetically, rank them by sales and units, and profile individual chains.

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