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Top 500 chains: sales and unit growth to be stagnant

Chicago / IL. (tni) The latest research from Technomic suggests a continued slowdown for the Top 500 chain restaurants, with cumulative 2017 sales growth at 3.2 percent, down from 3.8 percent in the prior year. Net unit growth also saw a decline at 1.1 percent, compared to 1.8 percent 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.

«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 percent
  • Fast casual is once again the leading subsegment, with 8.9 percent sales growth in 2017
  • Full service sales growth slowed from 1.4 percent growth in 2016 to 0.5 percent 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 percent. 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 percent increase, with growth led by «Texas de Brazil Churrascaria», «Ocean Prime», «STK» and «Fogo de Chao».

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