Looking Ahead: Top 500 Unit-Growth Forecast

Technomic’s unit-growth forecast for Top 500 chains helps draw a map of what to expect from the chain-restaurant industry as we approach the end of 2015 and move into the New Year. We recently compiled this Top 500 chain unit-growth forecast for 2015 using third-quarter unit counts obtained from public company filings, web collection and estimation. So, who are the industry leaders for unit growth?

As one may expect, fast casuals are the subsegment leader by far—achieving 7.1% unit growth since 2014. Fast-casual chains are steadily expanding thanks to their premium, made-to-order positioning, convenient service and build-your-own format. Although fine dining makes up a tiny slice of the unit-count pie (0.3%, compared to QSR’s 77% in 2014), this haute subsegment grew 5% since 2014, likely due to more disposable income among the affluent and an improved economy.

Midscale family-style chains, with 0.7% unit growth, follow this subsegment. This is largely due to several brand overhauls, elevated menu and dining experiences, and a heightened industry-wide focus on breakfast. Within the casual-dining segment, contemporary casual-dining chains—which fall between traditional and upscale casual-dining chains—saw the most growth at 2.3% since last year. Some other key takeaways from our 2015 unit-growth forecast include:

  • Steak and Italian/pizza menu categories are projected to lead unit growth for full-service restaurant chains
  • Among full-service restaurants, Bar Louie, Mellow Mushroom, STK and Texas de Brazil Churrascaria brands outpace their competitors for unit growth
  • Notable expanding a.m. eateries include The Egg & I Breakfast & Lunch and Another Broken Egg Cafe
  • Asian/noodle, coffee and bakery café, and chicken menu categories are projected to lead unit growth for limited-service restaurant chains
  • Among limited-service restaurants, WaBa Grill, Freddy’s Frozen Custard & Steakburgers, The Habit Burger Grill, Pieology Pizzeria, Taziki’s Mediterranean Cafe and PDQ brands lead unit-growth count
  • The fast-casual subsegment will continue to drive growth among the Top 500
  • Compared to 2014, unit growth will see a modest slowdown in 2015 as real-estate availability becomes more competitive and more chains seek nontraditional venues for expansion, but it will remain positive overall

AS I SEE IT, the trends shaping these quickly expanding restaurant chains will continue to influence unit growth in the coming year. Look for more contemporary family-style chains and a.m. eateries; fast-casual chicken and pizza outlets; healthful ethnic fast casuals, from Asian to Greek; fine-dining yet modern steakhouses; quick-service coffee chain outlets; and QSR-plus chains serving made-to-order favorites.

Note: This content originally appeared in the December 2015 issue of Technomic’s Foodservice Digest newsletter

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Darren Tristano

Darren Tristano is President of Technomic Inc. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations.

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