Consumers reshape the burger business

Technomic Top 500 data reveals a shift in consumer demand for burgers, away from traditional fast-food outlets. But they're not all shifting to fast-casual chains.
The California chain In-N-Out has the highest unit volumes among limited-service burger brands. | Photo: Shutterstock.

Americans still love burgers. In the U.S. last year, chains where burgers are the main attraction generated $110 billion in total sales, according to the 2024 Technomic Top 500 Chain Restaurant Report.

That’s more than one-quarter of all Top 500 chain sales and more than double sales by limited-service chicken chains. Burgers, it seems, remain king, no matter how much we like chicken.

But where Americans get their burgers from is different than it was just a few years ago. Consumers have reshaped the burger business, shifting toward newer brands or those with a higher perception of quality, and away from some of the more traditional quick-service chains.

Hardee’s is out, in other words, and In-N-Out is in.

Indeed, the venerable California-based chain surpassed Hardee’s, the Southeastern fixture, in terms of total sales and is now the ninth-largest burger chain in the U.S.

In-N-Out has been among the steadiest performers in the Top 500 for years. It grows only modestly and generates a lot of sales per location.

And they were busier than ever last year: The chain’s sales grew nearly 13% to $2.1 billion from just 400 restaurants. The typical In-N-Out location now generates $5.4 million, more than any other burger chain by $1.4 million.

(Check out the 10 largest U.S. burger chains.)

It is also more than four times the average unit volumes of your typical Hardee’s restaurant, where U.S. system sales declined more than 6% last year to $1.9 billion. Much of that was due to closures. The chain has closed about 150 locations over the past two years. One of its biggest franchisees, Summit Restaurant Group, filed for bankruptcy last year.

Hardee’s has been struggling for years with stagnant unit volumes that became a serious problem when costs took off coming out of the pandemic. Its average unit volumes are the same as they were a decade ago.

Put another way: Hardee’s average unit volumes would be 34% higher than they are now, about $400,000 per location, had the brand simply kept pace with inflation.

The burger sector is traditionally one of the toughest in the industry to categorize, because there is relatively little functional difference between many of these chains. Culver’s is typically considered a quick-service chain, but it looks and performs similarly to Freddy’s Frozen Custard and Steakburgers, which is considered fast casual.

And chains considered quick-service brands in fact performed better than fast-casual burger chains last year. Median sales growth for fast-food burger chains last year was 5.3%. At fast-casual chains it was 4.5%.

The fast-casual sector features a few chains in decline, including Fuddrucker’s (down 21.3%), BurgerFi (down 7.5%) and Smashburger (down 5.1%). To be sure, the same could be said for QSR burger brands, including Steak n Shake (down 10.1%) and A&W (down 1.2%) in addition to Hardee’s.

But in recent years, some higher-end concepts have been gaining market share, while some of the bigger brands have stagnated. In-N-Out, Whataburger (12.8% sales growth to $3.8 billion) and Culver’s (12.8%, $3.3 billion) have grown sales by nearly 13% each last year, more than double the rate of growth at Wendy’s (5.1%) and Burger King (6.6%) and many times that of Sonic (0.6%).

Shake Shack, meanwhile, now generates more than $1 billion a year in system sales after it grew by 21% last year. And Freddy’s is rocketing toward the Top 50. It is No. 62, with sales topping $900 million, up 14.5%.

The burger business also includes some interesting names further down the ranking, such as Jack’s Family Restaurants, where system sales grew 12.7% to $546 million and Cook Out, the $331 million concept (up 10.6%), along with the fast-casual Hopdoddy Burger Bar ($121 million, up 19.5%).

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