Fast Casuals' Growth Streak Continues

Fast-casual restaurants saw impressive 11% sales growth in 2013, with the five fastest-growing chains logging growth of more than 40%, according to the new "Top 150 Fast-Casual Chain Restaurant Report" from food industry researcher Technomic.

The segment's sales grew to $34.5 billion, and units grew nearly 8%. 

Fast casuals continue to steal share from full-service restaurants, but also from the QSRs with which they share the "limited service" segment, accounting for 15% of total limited-service sales last year. 

Technomic's reports show that sales growth for the limited-service segment -- and also for the top 500 largest U.S. chains across all segments -- grew just 3.5%, and full-service restaurants' sales grew only 2.5%. 

"It's no secret that today's consumer wants quality offerings made quickly," said Technomic EVP Darren Tristano. "Fast casual has made an impact on the full- and limited-service restaurant landscape. Before, a consumer might have traded a quality and fresh meal for something quick and economical. Fast casual continues to find new ways to offer both."

Bakery cafés continued to lead all menu categories among the top 150 fast-casual chains, with U.S. systemwide sales of $6.7 billion, up more than 9% over 2012. The leader in this category, Panera Bread, saw a 12% sales gain, to an estimated $4.1 billion. 

The Mexican and sandwich fast-casual categories followed, with U.S. systemwide sales of $6.4 and $4.9 billion, respectively. Mexican leader Chipotle Mexican Grill saw growth of 17% and estimated sales of $3.2 billion, and sandwich leader Jimmy John's Gourmet Sandwich Shop had sales of $1.5 billion.

The specialty menu category saw the fastest sales growth (up 16%), led by Dickey's Barbecue Pit, with estimated sales of $331 million. Chicken was second fastest-growing (up 12%), led by Zaxby's, with sales of $1.1 billion.

The sandwich and specialty segments saw the highest unit growth, with outlets up by 13% and 11%, respectively. 

Other leading fast-casual clusters and their leaders by sales include: Asian/noodle, led by Panda Express ($2 billion); burger, led by Five Guys Burgers and Fries ($1.1 billion); and pizza, led by Donatos Pizza  (estimated $174 million).

Fast-casual menu and concept diversity is increasing, and QSRs and full-service restaurants are realigning their formats and developing their own fast-casual concepts to compete, points out Tristano. 

For instance, Yum Brands' Taco Bell is testing a fast-casual concept called Taco Co. and Urban Taproom in Huntington Beach, Calif., and KFC opened fast-casual concept KFC Eleven in Louisville, Ky. in 2013. 

BurgerFi, which offers gourmet burgers in a hip, urban setting, led the list of fastest-growing fast casuals, and was also the fastest-growing chain across all restaurant segments, with 178% sales growth (to $44.5 million), and 175% unit growth (to 33). 

The other top-10 fastest-growing fast casuals were Hot Head Burritos, Lime Fresh Mexican Grill, Mooyah, Zoës Kitchen, Kneaders Bakery & Cafe, The Habit Burger Grill, Chop't Creative Salad Company, and Smashburger.

Among the top 50 fastest-growing chains across all restaurant segments, the leaders, after BurgerFi , included Del Frisco's Grille, Twin Peaks, CherryBerry, Orange Leaf Frozen Yogurt, Hot Head Burritos, Lime Fresh Mexican Grill, Mooyah, Freddy's Frozen Custard & Steakburgers, and Shake Shack.

(The 50 fastest-growing chains and 10 fastest-growing fast casuals and their dollar and unit growth data are listed on Technomic's site.)

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