Last month marked the return of the Technomic Top 500 Advanced Chain Restaurant Report – an in-depth review of the top 500 US restaurant chains performance rankings, classified by segment and menu category.
Coming off a strong performance in 2015, Technomic’s Top 500 chain restaurants experienced a deceleration in 2016, with cumulative sales growth checking in at 3.6%, down from 5.2% the prior year. Net unit growth stayed relatively stable at 1.7%, compared to 1.9% in 2015, pointing to declining customer traffic and weakening same-store-sales as the key reasons for the slowdown.
“Today’s foodservice environment continues to create challenges for operators to build market share,” states Darren Tristano, Technomic chief insights officer. “Innovative independent restaurants, emerging regional brands and expansion in the fast casual market have pushed operators to be more nimble, focused and convenient. Big chains continue to see challenges with younger Generation Z and millennial consumer patrons who expect greater social corporate responsibility. Consumers will continue to look for quality and value in their foodservice experiences.”
Full service chains within the Top 500 ranking took the biggest hit in 2016, seeing their total sales growth slow from 4% to 1.4%, while unit growth also fell from 1.1% to 0.5%. While these declines can mostly be attributed to the lagging performance of the top casual dining chains, there were still bright spots to be found, with sales increases in fine dining chains up by 4.9% and polished casual chains by 4.3%.
Relative to its full service counterpart, limited service fared better in 2016, growing its sales at a cumulative rate of 4.4% with unit growth of 1.9%. Propelling the segment forward was the continued success of fast casual, which saw annual sales growth of 8.1%. However, the report says that signs of segment maturity are starting to become visible as sales growth for fast casual chains dropped under double digits for the first time in recent history. Quick service chains, who make up over 60% of the Top 500’s total sales volume, chipped in a sales growth of 3.7%, down from 4.6% in 2015 while unit growth was unchanged over the past two years at 0.9%.
The Technomic Top 500 Advanced Chain Restaurant Report provides a one-year sales forecast by menu category, an expanded outlook and opportunities section, as well as key themes to help navigate the current industry landscape. You can purchase and learn more about this and other industry reports at technomic.com.