Preliminary Top 500 Data Shows Big Chains Grew Sales Only 3.2% In 2017

The latest research from Technomic Inc. shows a continued slowdown for the Top 500 chain restaurants, with cumulative 2017 sales growth of 3.2%, down from 3.8% in the prior year. Net unit growth also declined 1.1%, compared to 1.8% growth in 2016. The growth of the Top 500 is also slower than Technomic’s estimate of growth of the total foodservice industry, which the Chicago-based research firm pegs at 3.7% last year.

The data comes Technomic's 2018 Top 500 Chain Restaurant Advance Report. The advance report is available for purchase prior to the full report's publication at the end of March at Top 500.

"Chains today are facing increasingly challenging business conditions, with most publicly held chains seeing mixed same-store sales results in 2017," says 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 data from the report include:

• 2017 sales growth was heavily driven by limited-service chains, up by 4.1%
• Fast casual is once again the leading sub-segment, with 8.9% sales growth in 2017
• Full-service sales growth slowed from 1.4% growth in 2016 to 0.5% 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, which all grew their sales 20% or more. Out of the 20 fastest-growing chains, half of them are fast-casual concepts, proving that this sub-segment is still the bright spot in the industry. Exceptional sales growth was also seen from the fine-dining sub-segment which experienced a 3.8% increase, with growth led by Texas de Brazil Churrascaria, Ocean Prime, STK, and Fogo de Chao.

Note: The results reported here are preliminary and subject to revision.

Information on Technomic’s wide variety of foodservice research can be found Technomic.