Sales in the top 500 U.S. restaurant chains rose 1.8% last year to an estimated $234 billion, according to the just-released annual report on these leading restaurant companies from foodservice consultancy Technomic Inc.
While noting that the industry has "a lot of ground to recover and still faces many challenges," Technomic President Ron Paul stressed that it's encouraging to confirm that improvements in the U.S. economy are beginning to translate into improved performance for the leading chains.
The 10 fastest-growing chains across formats within the U.S. last year were Five Guys Burgers and Fries (up 38%, to an estimated $625 million); Jimmy John's Gourmet Sandwich Shop (up 22%, to an estimated $735 million); Chipotle Mexican Grill (up 21%, to $1.83 billion); BJ's Restaurant & Brewhouse (up 20%, to $514 million); Yard House (up 18%, to an estimated $216 million); Cheddar's Casual Café (up 14%, to an estimated $309 million); Buffalo Wild Wings Grill & Bar (up 14%, to an estimated $1.7 billion); Firehouse Subs (up 14%, to $235 million); Noodles & Company (up 14%, to $261 million); and Panda Express (up 13%, to $1.4 billion).
The top 10 fastest-growing chains' combined sales were $7.8 billion, an 18% increase over 2009. On average, their unit counts grew 14% (although Five Guys and Jimmy John's saw 35% and 20% unit growth, respectively).
As a whole, limited-service chains' sales grew by 2.5%.
McDonald's gained 4.4% to reach $32.4 billion. Subway continued to dominate the growing "other sandwich" subsegment, gaining 6% to reach $10.6 billion (compared to just 1.8% average growth by the entire subsegment). Subway held its place as the second-largest U.S. restaurant chain after McDonald's, followed by Starbucks, Burger King and Wendy's.
The limited-service pizza, donut and coffee/other beverages subcategories saw strong growth, with Starbucks, Dunkin' Donuts and Pizza Hut posting estimated sales growth of 8.7%, 6.1% and 7.8%, respectively. Asian, which grew at 9.3%, was another subsegment with sales growth well above the overall average for the limited-service segment. Within this group, California-based Panda Express stood out with 12.8% growth to reach $1.4 billion.
Overall top-500 growth continued to be driven by fast-casual chains. Chipotle Mexican Grill again led the Mexican category, while Five Guys was the big standout within the hamburger segment.
Within top 500 full-service restaurants, the big story was in the steak category, which recovered from a 6.4% decline in 2009 to realize a sales gain of 2.2% in 2010, even as it continued to be affected by slow unit expansion, additional closures and declines in customer traffic and check averages. Nor was the steak category the only sub-segment that surpassed average sales performance within the full-service segment.
Overall, more than 50% of the top 500 restaurant chains posted at least nominal sales increases. Just 231 saw sales declines in 2010, compared to 283 in 2009.
However, there were winners and losers within each segment and menu category. These widely mixed results demonstrate the overall competitiveness of the industry and the need for suppliers and operators to carefully identify and focus on the winning concepts, Technomic points out.
Growth within the top 500's international businesses continued to outpace their domestic operations in 2010. International sales rose 3.1%, and international unit growth was up 3.7%, compared to 0.5% unit growth for U.S. units.