“As the U.S. economy continued to struggle against rising gas prices, aggressive chain restaurant unit expansion and menu price increases fueled the Top 500 to outperform the restaurant industry at large, which grew 5.9 percent,” said Darren Tristano, Managing Director of Technomic Information Services.
Significant growth continued to come from the limited-service beverage, donut and bakery cafe categories with Starbucks, Dunkin Donuts and Panera Bread posting 2006 double-digit sales growth of 21.5, 20.7 and 19.7 percent, respectively. McDonald’s, the largest U.S. restaurant chain grew 5.7 percent with sales exceeding $27.1 billion. Subway continued to dominate the growing other sandwich segment with 7.5 percent sales growth and total sales in excess of $7.7 billion.
Limited-service chains within the Technomic Top 500 accounted for 82 percent of all U.S. “fast food” restaurants. As a whole, this group grew at a rate of 5.8 percent. Chicken, which grew at 4.9 percent, was another limited-service sub-segment with sales growth above their segment average. Within this segment, Atlanta-based Chick-fil-A grew 15.2 percent with sales of nearly $2.3 billion.
Growth continued to be driven by quick-casual chains. The Mexican category was led by Chipotle and Qdoba Mexican Grill which posted U.S. systemwide sales growth of 42.8 and 31.7 percent, respectively. The Asian category continued its sales growth with P.F. Chang’s Pei Wei concept (34.5 percent) and Panda Express (21.7 percent). Standouts in the other sandwich segment included Potbelly Sandwich Works and McAlister’s Deli with growth of 51.4 and 23.1 percent, respectively.
Within full-service restaurants, Top 500 full-service ethnic Asian and Italian categories posted strong sales growth rates of 9.8 and 7.0 percent, respectively, compared to an overall full-service industry growth rate of 6.0 percent. The real success story was in the varied menu category which continued to outperform the segment with 10.3 percent sales growth, led by America’s two largest casual dining chains; Applebee’s Neighborhood Grill & Bar (8.4 percent) and Chili’s Grill & Bar (14.5 percent) increased sales largely through unit growth and price increases. The steak category posted strong results with sales growth of 6.4 percent. Seafood (4.5 percent), Mexican (3.4 percent) and Family-style restaurants (2.7 percent) showed only modest growth.
In total, the top 10 fastest-growing chains’ sales accounted for $4.8 billion, a 38% increase over 2005. Unit counts grew 23 percent.
Impressively, 4 chains with sales over $2 billion achieved double-digit growth in 2006 including Starbucks (21.5 percent), Dunkin Donuts (20.7 percent), Chick-fil-A, (15.2 percent) and Chili’s Grill & Bar (14.5 percent).
While the Top 500 chains posted strong growth in the aggregate, individual results varied dramatically with sales ranging from Salsarita’s Fresh Cantina’s 153 percent growth to Tony Roma’s 27 percent estimated sales decline. Fully 77 percent of the Top 500 restaurant chains posted at least nominal sales increases; 103 of these chains suffered sales declines in 2006. Both winners and losers appeared in 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 upon the winners.
International performance by the Top 100 restaurant companies remained strong in 2006. International sales (up 11.2 percent) outpaced U.S. sales (up 5.9 percent); international unit growth was also up 8.0 percent vs. 3.8 percent for U.S. units. International sales leader McDonald’s posted systemwide sales growth of 9.3 percent internationally.
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