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Top 150 Fast-Casual Chain Restaurant Report

I recently came across this while perusing the PRNewswire. I found it very insightful so, I figured I would pass it on to my readers. It is from Technomic's, which is a consultant group and fact-based agent for the the food and foodservices industries. So, what they have to say is important and a key indicator to what is happening in the marketplace.

They recently published their Top 150 Fast-Casual Chain Restaurant Report. In it they reveal that the fast-casual food segment continues to steal share from full-service chains and drive limited-service growth, making up 15 percent of the $231 billion limited-service restaurant segment. Fast-casual sales increased 11 percent in 2013, while all limited-service chains grew by only 3.5 percent. So, what does this mean? It means that your sub shops, pizza places, burger joints and other in-line eateries are growing faster than the walk-in and sit down places like Denny's, diners and IHOPs (among many others.)

"It's no secret that today's consumer wants quality offerings made quickly," said Darren Tristano, Executive Vice President of Technomic. "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, and it's become a $34.5 billion segment."

Bakery cafes continued to lead all menu categories among the Top 150 fast-casual chains, with U.S. system wide sales of $6.7 billion, up more than 9 percent over 2012. The Mexican and Sandwich categories were second and third largest, with U.S. system wide sales of $6.4 and $4.9 billion, respectively.

The Specialty menu category saw the fastest sales growth, up 16 percent followed by chicken, which was up 12 percent. The Sandwich and Specialty clusters experienced the highest unit growth, growing outlets by 13 percent and 11 percent, respectively. Top fast-casual clusters and their leaders include:

  • Bakery cafe led by Panera Bread with estimated sales of $4.1 billion.
  • Mexican led by Chipotle Mexican Grill with estimated sales of $3.2 billion.
  • Sandwich led by Jimmy John's Gourmet Sandwich Shop with sales of $1.5 billion.
  • Chicken led by Zaxby's with sales of $1.1 billion.
  • Asian/Noodle led by Panda Express with sales of $2 billion.
  • Burger led by Five Guys Burgers and Fries with sales of $1.1 billion.
  • Pizza led by Donatos Pizza with estimated sales of $174 million.
  • Specialty led by Dickey's Barbecue Pit with estimated sales of $331 million.

I do not think that this information comes as much of a surprise to folks. The walk-in and out places are not only quick and convenient, they are also much cheaper than the walk-in and sit down places. Sit down places are typically higher in their pricing per plate. Even when they compete with the walk-in and out places there is still the issue of the tip to the servers. That is 15 to 20 percent savings right there. Overall, the consumer saves upwards of 30 to 35 percent.

The Panera, Panda Express and Chipotle's of the world have got it down. They are definitely industry leaders with their models.

In the sub and hoagie arena, the models are still evolving. The strong industry leaders of yesterday seem to be trailing behind. The front runners like Jimmy Johns is coming up pretty darn fast, as are Jersey Mike's and Firehouse Subs. Any one of these companies can assume the lead at anytime. As long as they keep their models fast, convenient and high quality ingredients, there is no telling where they will be next year.

As for the sit-down eateries, let's not count them out just yet. They will find a way to re-invent themselves and bring something new into the marketplace. We will just have to wait and see.

Don't you just love capitalism? It is such a great dish. It can be eaten cold or hot and it can be sliced in so many different ways. It is just utterly delicious!

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