Restaurant Sales Slow
March 25/Chicago/Business Wire -- The 500 largest U.S. restaurant chains registered a decline in sales, posting 0.8% annual sales decline in 2009. According to data released by Technomic Inc. in its annual reporting on the top U.S. restaurant chains, the foodservice consultancy found that U.S. systemwide sales for the Top 500 declined to an estimated $230.0 billion in 2009, down almost $2 billion over 2008.
"As the U.S. economy remained in a recession, restaurant operators continued to face a host of challenges, including cost pressures followed by declines in consumer dining demand. The data in this report clearly supports what we've been hearing in our consumer research surveys over the past year. Sales among the Top 500 restaurant chains contracted 0.8% in 2009, versus 3.4% growth in 2008," said Ron Paul, president of Technomic. "Many chains scaled back their U.S. unit expansion efforts and shuttered underperforming stores, growing units by just 0.3% compared with 1.8% a year ago."
Growth came from the limited-service Mexican, Bakery Café and Donut categories with Chipotle, Panera Bread and Dunkin' Donuts posting 2009 sales growth of 13.9% and an estimated 7.1% and 3.7%, respectively. McDonald's, the largest U.S. restaurant chain, grew 2.9%, with sales estimated at $30.9 billion. Subway continued to dominate the growing Other Sandwich segment, with 4.2% sales growth and total sales of $10 billion, considerably better than the 0.8% growth posted by the Other Sandwich chains collectively.
Limited-service chains within the Technomic Top 500 accounted for 85% of all U.S. "fast food" restaurant sales. As a whole, this group grew at a rate of 0.1%. Asian, which grew at 5.9%, was another limited-service subsegment with sales growth well above its segment average. Within this group, Panda Express grew 8.8%, with sales of $1.2 billion.
Growth continued to be driven by fast-casual chains. The Mexican category was led once again by Chipotle Mexican Grill and Qdoba Mexican Grill, posting U.S. systemwide sales growth of 13.9 and an estimated 6.5%, respectively. Standouts in the hamburger segment included Five Guys Burgers and Fries and The Counter, with estimated sales growth of 50.2% and 67.3%, respectively.
Full-service chains within the Technomic Top 500 accounted for roughly 40% of all U.S. restaurant sales within this segment. As a whole, this group decreased sales 2.9%. Asian, which grew at 2.9%, was the only full-service subsegment with positive sales growth. Within this group, several mid-sized brands, including RA Sushi Bar Restaurant, Stir Crazy Asian Grill and MuHot Mongolian Grill, drove its growth with double-digit sales increases.
Within Top 500 full-service restaurants, the real story was in the Steak category, which experienced a decline in sales of 6.4%, a deeper decrease than the 0.7% decline seen in the prior year. This group continued to be affected by declining customer traffic and check averages, slowing unit expansion and closures. Seafood and Mexican categories also posted below-average results with sales declines of 4.2% and 4.0%, respectively.
In total, the top 10 fastest-growing chains' sales accounted for $5.9 billion, a 19% increase over 2008. Unit counts grew 16%.
While the Top 500 chains posted a decline in sales in the aggregate, individual results varied dramatically with sales ranging from Yogurtland's 157.7% growth to Bennigan's Grill & Tavern's 71.8% estimated sales decline. Only 40% of the Top 500 restaurant chains posted at least nominal sales increases; 283 of these chains suffered sales declines in 2009 compared to only 213 in 2008. 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 on the winners.
International performance by the Top 500 restaurant chains significantly outperformed their domestic counterpart growth in 2009. International sales (up 3.3%) outpaced U.S. sales (down 0.8%); international unit growth was also up 5.2% versus 0.3% for U.S. units.
From the March 29, 2010, Prepared Foods E-dition