Fast-Casual Segment Performance 2013: Chicken Restaurants

Chicken-focused concepts on Technomic’s Top 150 Fast-Casual Chain Restaurants list saw U.S. systemwide sales climb a healthy 11.3 percent to more than $3.2 billion in 2012. Unit count rose 4.7 percent to 2,447.

That’s not quite as strong a performance as the Top 150 fast-casual concepts recorded as a group; sales for the Top 150 overall rose 13.1 percent, and unit count increased 9.3 percent.

But the top fast-casual chicken chains still outperformed the overall limited-service chicken segment, which includes fast-food as well as fast-casual concepts. And of the 12 chicken chains on this year’s Top 150 Fast Casual list, four saw sales gains greater than 15 percent in 2012.

Zaxby’s, based in Athens, GA, leads the fast-casual chicken segment by a mile. Zaxby’s, No. 6 overall on the Top 150 list, posted U.S. systemwide sales of more than $979 million last year—an increase of 16.5 percent over 2011. Units rose 4.6 percent to 565.

El Pollo Loco, in second place in the chicken segment and No. 9 among the Top 150, recorded a 3.3 percent uptick in systemwide sales to $563 million, on scant unit growth of 0.8 percent (to 397).

Fast-growing fast-casual chicken performers include Wingstop (No. 4 in the segment, sales up 18.2 percent), Raising Cane’s Chicken Fingers (No. 5, sales up 26.0 percent) and Planet Wings (No. 10, sales up 19.4 percent).

chicken_chart_500

*Technomic estimate
Source: Technomic, Inc.; company reports

On the menu front, non-chicken items have been some of the most successful introductions for fast-casual chicken chains in the past year. Zaxby’s scored a hit last spring with a limited-time-offer Brownie Batter Milkshake; in June of this year, spurred by the success of that item and other LTO shakes, Zaxby’s dumped its regular shake lineup favor of three signature flavors: Brownie Batter, Birthday Cake and Banana Pudding.

Boston Market, No. 3 in the fast-casual chicken segment and No. 10 overall on the Top 150 list, introduced St. Louis Ribs as a limited-time offer this April. In July, Boston Market added them to the permanent menu, announcing that since the ribs’ introduction, sales were up more than 16 percent and transactions were up 8 percent.

Flame-grilled chicken specialist El Pollo Loco also has tested several new protein offerings on a limited-time basis. Last year, the chain brought back fish tacos in two varieties, Classic Baja and Spicy Chipotle (both featuring Alaskan pollock breaded in a cayenne-spiked beer batter); so far in 2013, El Pollo Loco has offered out Baja Shrimp and pork carnitas as LTOs.

Bundled-meal deals, predictably, have remained a key value offering for chains in the segment. Pollo Tropical has run Two-Can-Dine-for-$9.99 deals on select days (including Valentine’s Day). Wingstop this spring rolled out the Wingstop Triple Double Pack, featuring eight classic wings and 12 boneless wings tossed in a choice of three sauces, plus two dips, two fresh-baked yeast rolls, an order of veggie sticks and a large order of fresh-cut seasoned fries for $19.99. And El Pollo Loco, which introduced a new, more-contemporary prototype with an open kitchen at the end of 2012, debuted a three-course family meal featuring the chain’s new taco salad for $20 this summer.

One concept to watch within the segment is Planet Wings, a Middletown, NY-based chain with units in and around New York City (including stores in New Jersey) and in South Carolina. Planet Wings ended 2012 with 29 units, up 20.8 percent from 2011. Sales climbed 19.4 percent to an estimated $21.5 million.

One of the chain’s primary differentiators from most other fast-casual concepts—chicken-focused or otherwise—is delivery service. Planet Wings’ website notes that founders Franco and Paula Fidanza realized back in 1994 that “there was an amazing untapped opportunity” for delivery in the limited-service market. Based on findings from Technomic’s 2012 The Future of LSR: Fast-Food and Fast-Casual Restaurant Consumer Trend Report, significant opportunity remains: 35 percent of consumers surveyed for the report said delivery service could encourage them to patronize fast-casual restaurants more often.

Planet Wings also emphasizes ingredient quality; the chain touts its use of “always fresh, never frozen” Bell & Evans air-chilled chicken. Wings are available in 24 flavors, including Jamaican Jerk, Hot Gourmet Garlic and Bourbon BBQ. The menu branches out into burgers, sandwiches, salads and “Planet Mexicana” offerings such as quesadillas and tacos.

Looking ahead for the fast-casual chicken segment, continued focus on high-quality ingredients, fresh preparations and bold flavors likely will play a vital role in concepts’ sustained success. So, too, will innovations in ordering and payment that allow on-the-go and always-connected guests to place an order anywhere and pick up their order in-store quickly.

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Christine LaFave Grace

Christine LaFave Grace writes for and produces Technomic's Trends & Directions e-newsletters. She joined Technomic in 2013 as an associate editor. Her previous roles include assistant digital editor for Crain Communications’ Modern Healthcare magazine and associate editor at Reed Business Information’s Restaurants & Institutions magazine.

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