Technomic Sees Slowing Sales, Unit Growth at Top 500 Chains

Domestic system-wide sales for the top 500 rose $7.6 billion to an estimated $230.2 billion in 2008.

Last year's growth, some of which can be attributed to higher menu prices, came amid a recession that has consumers cutting back on meals away from home. At the same time, those who still dine out have been favoring value meals and other promotions as they try to find less expensive alternatives.

"Restaurant operators faced a host of challenges, including cost pressures followed by declines in consumer dining demand," Technomic president Ron Paul said.

The sales increases came from publicly held limited-service eateries, including bakery-cafe Panera Bread Co., coffee chains such as Starbucks Corp. and Peet's Coffee & Tea Inc., and hamburger chains such as Burger King and McDonald's.

Privately held companies such as Subway, Panda Express, Five Guys Burgers and Fries, and Jimmy John's Gourmet Sandwich Shop posted some of the industry's fastest rates of sales growth, according to Technomic.

Sales in the Mexican, steak and seafood categories declined 1.8 percent, 0.7 percent and 0.4 percent, respectively.

Last year, the weak U.S. dollar fueled a 13.4 percent rise in international sales at the top 500 restaurant chains, Technomic said. International sales growth was 7.9 percent in 2007, according to the research firm.

As the economic slowdown dents demand, several restaurant companies are opening fewer new outlets. "Many chains scaled back their U.S. unit expansion efforts, growing units by just 1.8 percent" in 2008 compared with 2.6 in 2007, Paul said. International unit growth rose 9.9 percent in 2008.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

Restaurants are worried about the Sysco-Restaurant Depot deal. Should they be?

Independent operators were shaken when the broadline distributor announced a $29 billion acquisition of the cash-and-carry operation. But some say the deal could have some real benefits.

Financing

How will McDonald’s affect the beverage market?

The Bottom Line: The fast-food giant begins its big push into the fast-growing drinks business starting next month. The impact may not be what you think it will be.

Marketing

Chili’s tries to catch lightning in a bottle again with chicken sandwich campaign

Marketing Bites: Like it did with its Big QP burger launch last year, the casual-dining chain is once again going after fast food’s value perception.

Trending

More from our partners