“I anticipate that the pizza segment in 2018 will continue to see same-store sales growth that outperforms others,” he adds. “Both Blaze Pizza and Mod Pizza, for instance, are on many of restaurant industry’s fastest-growing concept lists. Pizza also surpasses others in meeting consumer demands by utilizing technology for ease of online ordering and delivery.”
Blaze, by the way, grew its revenue 51 percent in 2017 and said it has franchise agreements in place to develop more than 400 additional locations across the U.S., Canada, the Middle East, and Northern Africa. The 256-unit brand hopes to have 1,000 restaurants and $1 billion in annual systemwide sales within 4–7 years. It opened 66 restaurants in 2017, achieved comps growth of 3.7 percent, and boosted average-unit volumes to $1.4 million.
In regards to the other segments measured, quick-service posted a 0.8 percent increase led by Carrols Restaurant Group (5.2 percent), Taco Bell (4 percent), and McDonald’s (3.6 percent).
Taco Bell and McDonald’s are two brands leading the value charge right now. Taco Bell’s Nacho Fries release in January was the company’s most successful product launch ever. CNBC reported that from January 25 to the middle of March, the company sold more than 53 million orders. Taco Bell has continued to add to its $1 menu since and said it plans to roll out 20 new discounted items this year.
McDonald’s $1 $2 $3 Dollar Menu broke out the gates with mixed results in January, but offers flexibility and possibility for the fast-food chain moving forward, especially in regards to its barbell approach to premium offerings that has proven successful in recent history. Its McCafe lineup and Signature Crafted premium sandwich platform were cited by executives as key drivers to comps growth in 2017. McDonald’s fourth-quarter same-store sales lifted 4.5 percent in the U.S. For fiscal 2017, McDonald’s global comparable sales climbed 5.3 percent, giving the company its best sales performance in six years. Systemwide sales were up 7 percent and McDonald’s reported positive guest counts in all segments.
Fast casual’s struggles on the publicly traded side continued. Like pizza, this is a segment with a heavy privately held presence. But unlike pizza, the public chains aren’t lighting up sales. Chipotle reported a 6.4 percent increase against 2016’s 20.4 percent drop. The brand reports first-quarter results Wednesday and investors will be eager to learn of new CEO Brian Niccol’s plans. The former Taco Bell leader joined the company in early March.
Taco Cabana (7.3 percent decline) and Pollo Tropical (6.5 percent fall) had challenging years. Both were affected by hurricane activity and are in the process of a “Strategic Renewal Plan.” For the fiscal year, parent Fiesta Restaurant Group reported a loss of $26.2 million, or $1.35 per share. Revenue, which was $162.2 million in the fourth quarter, came in at $669.1 million for the full year. The company reported a fourth-quarter loss of $10.8 million after posting a profit in the same period a year ago.
Better days could be ahead, however. Pollo Tropical relaunched its brand in October and Taco Cabana, execs said, was up next.
In fact, preliminary Q1 results showed comps growth at Pollo Tropical of 1.1 percent, year-over-year, including a 3.4 percent increase in average check. Taco Cabana saw a 1.7 percent decrease, including a 9.6 percent increase in average check.
Upscale casual and casual reported flat results for the year at 0.1 percent and 0 percent, respectively. Texas Roadhouse topped the category with 4.5 percent growth for the year. Applebee’s (negative 5.3 percent) was on the other side, while Eddie V’s comps rose 4.3 percent through Q4. Sullivan’s Steakhouse posted a 6.3 percent drop.
There’s reason to think positively in regards to Applebee’s. Parent company DineEquity rebranded to Dine Brands in the fourth quarter. This news came with positive same-store sales of 1.3 percent in Q4. They dropped 0.4 percent at IHOP, year-over-year. The casual-dining leader is forging ahead, though, with a restructured leadership team and a commitment to off-premise, value, and its core guest. Read more about the process here.
You can also dive into Texas Roadhouse’s impressive consistency in this story.
Sullivan’s, meanwhile, has been rumored as a sales candidate for Del Frisco’s Restaurant Group. Chief executive officer Norman Abdallah said in March that: “While Sullivan’s Steakhouse has many compelling attributes, we believe that Del Frisco’s Double Eagle Steakhouse and Del Frisco’s Grille provide us with far greater opportunities for expansion,” and “that "We have now reached the conclusion in consultation with our board, to consider strategic options for Sullivan's Steakhouse including a potential sale of the brand.” Sullivan’s comparable same-store sales plummeted 10.8 percent in the fourth quarter, year-over-year, driven down mainly by a 15.5 percent decrease in customer counts.