Higher prices and more locations drove chain restaurant sales last year

Technomic Top 500: Chain restaurants continued to record strong growth last year, but mostly without higher traffic. And there were wide variations in performance throughout the ranking.
7 Brew
7 Brew was the fastest growing chain in the U.S. last year, with 267% sales growth, according to Technomic. | Photo courtesy of 7 Brew.

Chain restaurants continued to grow at a healthy pace in 2023, according to the 2024 Technomic Top 500 ranking of the country’s largest restaurant brands by sales.

Total sales for the 500 chains increased $31 billion, or 7.8%, to $424 billion, continuing a three-year run of strong sales growth.

“It was a very, very strong growth year for our Top 500,” Technomic Managing Principal Joe Pawlak said at the Restaurant Leadership Conference on Monday.

But that sales growth came from two sources: Higher prices and more units.

Top 500 chains added more than 4,000 net new locations, or 1.8% growth. That’s the fastest rate of unit count growth in seven years. Top 500 chains now operate 233,490 locations, or nearly 6,000 locations more than in 2019, before the pandemic led to thousands of closures.

Price increases also fueled sales growth, as average restaurant prices increased 7.1% last year. The combined increase in prices and unit count suggests that consumers either visited chain restaurants less often or ordered lower-priced options or some combination of both.

(Check out the country’s 10 largest restaurant chains.)

Sales were somewhat top heavy, as the 10 largest restaurant chains grew at a faster rate than the rest of the Top 500. The Top 10 chains grew 9.1% last year and now represent 44% of all Top 500 sales, up from 42% in 2019.

The very largest chains have more resources to spend on advertising, technology and remodels that have helped them open some distance between them and the remaining chains.

McDonald’s, as it has every year since the ranking’s inception, remains the country’s largest restaurant chain by sales, with system sales last year of $53 billion. It is larger than the combined sales of the second and third largest chains, Starbucks and Chick-fil-A. But both those chains grew at a healthier clip (12.5% and 14.7%, respectively) than did the Chicago-based fast-food chain (9%).

The one major move on the Top 10 came from Chipotle Mexican Grill, which leapfrogged Domino’s to be the 9th largest chain.

But there is a big drop between the No. 10 and No. 11 chain on the ranking. Domino’s is about $2.6 billion in sales larger than Panera Bread, meaning it will be some time before a new chain is able to break into that group.

Limited-service restaurants also continued to outperform full-service concepts. Sales at fast-casual chains grew 11.2% last year, followed by quick-service at 7.9%. But midscale or family-dining restaurants grew 5.7% and casual-dining chains 4.7%.

Technomic is a sister company of Restaurant Business. It compiles the data through a variety of sources, including company submissions, publicly available documents and estimates.

The ranking features some of the country’s fastest growing chains that have thrived with a combination of strong sales and aggressive unit growth. 7 Brew, the drive-thru coffee chain, was the fastest-growing concept in the country last year, with total system sales growth of 267%, including 350% unit growth. Close behind was the Asian chain KPOT Korean BBQ and Hot Pot, which grew sales by 252%. Dave’s Hot Chicken, which has been among the fastest growing chains in recent years, doubled in size in 2023.

But for all of that growth there were plenty of chains that saw steep declines. That includes Boston Market, the biggest decliner of the year, with sales cut 57%. That likely has fallen much further this year as more of its restaurants have closed. The casual dining chain O’Charley’s closed more than half of its units and saw sales decline 48%.

Chicken chains continued to thrive, with sales in that segment up 12% in 2023, the fifth straight year of double-digit sales growth. Led by companies like Chick-fil-A, Raising Cane’s, Popeyes and Wingstop, the segment now accounts for $49 billion in total sales.

7 Brew’s immense growth also highlights the rapid expansion of drive-thru coffee chains, including Dutch Bros (24% sales growth) and Scooter’s (41% sales growth).

Pizza chains of all kinds, however, have hit a plateau. Sales at such chains grew just 3%, after recording just 2.1% sales growth in 2022. Companies like Domino’s, Pizza Hut, Papa Johns and Little Caesars have slowed after thriving coming out of the pandemic.

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