Sales Growth Stagnant for Top 500 Food Chains, Report Finds

Technomic's recently published report finds both sales and unit growth to be stagnant for leading chains.

CHICAGO -- The latest research from Technomic suggests a continued slowdown for the Top 500 chain restaurants, with cumulative 2017 sales growth at 3.2%, down from 3.8% in the prior year. Net unit growth also saw a decline at 1.1%, compared to 1.8% in 2016. The source of this information, Technomic's 2018 Top 500 Chain Restaurant Advance Report, is the industry's leading chain performance tracker, providing 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.

Also read, The Global Fast Food Market Forecasted to Grow at a CAGR of 5.16 % During the Period 2018-2022.

"Chains today are facing increasingly challenging business conditions, with most publicly held chains seeing mixed same-store sales results in 2017," said Joe Pawlak, Technomic managing principal. "Among these challenges lie the rise of retail foodservice and other meal options. Additionally, consumers are becoming accustomed to a stronger deal environment, forcing operators to lessen their margins to stay competitive."

Key report findings include:

• 2017 sales growth was heavily driven by limited-service chains, up by 4.1%
• Fast casual is once again the leading subsegment, with 8.9% sales growth in 2017
• Full service sales growth slowed from 1.4% growth in 2016 to 0.5% in 2017
• One of the fastest growing chains, Walk-On's Bistreaux & Bar, is also new to the rankings

Other new entrants into the Top 500 chain rankings include Jinya Ramen Bar, bartaco and Naf Naf, who all grew their sales by over 20%. Out of the twenty fastest-growing chains, half of them are fast-causal concepts, proving that this subsegment is still the bright spot in the industry. Exceptional sales growth was also seen from the fine-dining subsegment which experienced a 3.8% increase, with growth led by Texas de Brazil Churrascaria, Ocean Prime, STK and Fogo de Chao.

The advance report is available for purchase prior to the full report's publication at the end of March at https://www.technomic.com/available-studies/industry-reports/top-500.

SOURCE Technomic