Chicago, May 31, 2006, Business Wire –The 500 largest U.S. restaurant chains registered solid performance, posting 7 percent annual sales growth in 2005. In its annual report on the top U.S. restaurant chains, leading foodservice consultancy Technomic found that U.S. systemwide sales for the Top 500 rose to an estimated $199.9 billion in 2005, up $13 billion over 2004 on a same-chain basis.

“Even as the U.S. economy struggled against rising gas prices and a turn in interest rates, the Top 500 still managed to outperform the restaurant industry at large, which grew 5.6 percent,” said Darren Tristano, Managing Director of Technomic Information Services.

Significant growth continues to come from the limited-service beverage and other sandwich categories with Starbucks and Subway posting 2005 double-digit sales growth of 20.5 percent and 14.4 percent, respectively. McDonald’s, the largest U.S. restaurant chain grew 5.1% with sales exceeding $25.6 billion. Panera Bread continues to dominate the growing bakery café segment with 28.6 percent sales growth and total sales in excess of $1.6 billion.

Limited-service chains within the Technomic Top 500 accounted for 82 percent of all U.S. “fast food” restaurants. As a whole, this group grew at an impressive rate of 7 percent. Other limited-service sub-segments with sales growth above the segment average include bakery café (27.8 percent), beverage (19.8 percent), Mexican (12.4 percent), other sandwich (12.0 percent), donut (11.5 percent) and chicken (9.4 percent). 

Growth continues to be driven by leading chains. The Mexican category was led by Taco Bell’s 8.4 percent sale growth and quick-casual standout Chipotle, which grew an estimated 27.1 percent. The donut category continues it’s growth with Dunkin Donuts’ 13.8 percent sales and the category’s increased sales of specialty coffee. The chicken segment saw strong growth of 13.1 percent from Atlanta-based Chick-fil-A and an emerging southeastern quick-casual chain, Zaxby’s, that ended the year with over 330 units.

Within full-service segments, the seafood and Asian categories posted strong sales growth rates of 12 percent and 10.5 percent compared to an overall full-service growth rate of 6.9 percent. The varied menu category also outperformed the segment with 8.7 percent sales growth, led by America’s largest casual dining chain Applebee’s Neighborhood Grill & Bar, which increased sales by 8.8 percent. The Mexican, steak and Italian categories all posted strong results with sales growth of 8.3 percent, 7.6 percent and 6.6 percent, respectively. Family-style restaurants continued to struggle, but remained flat.

Impressively, 5 chains with sales over $2 billion achieved double-digit growth in 2005 including Starbucks (21 percent), Subway (14.4 percent), Dunkin Donuts (13.8 percent), Sonic Drive-Ins (13 percent) and Chili’s Grill & Bar (11.1 percent).

While the Top 500 chains posted strong growth in the aggregate, individual results varied dramatically with sales ranging from Five Guys Burgers and Fries’ 194 percent growth to Big Bowl Restaurant’s 39 percent estimated sales decline. Fully 76 percent of the Top 500 restaurant chains posted at least nominal sales increases; 111 of these chains suffered sales declines in 2005. 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 upon the winners.

International performance by the Top 100 restaurant companies remained strong in 2005. International sales (up 8.5 percent) outpaced U.S. sales (up 6.3 percent); international unit growth was also up 5.4 percent vs. 3.8 percent for U.S. units. International sales leader McDonald’s posted systemwide sales growth of 6.1 percent internationally.

The 2006 Technomic Top 500 Chain RestaurantReport is the first of its kind, replacing and expanding upon Technomic’s prior Top 100 and Second 100 reports. The Top 500 provides Technomic’s exclusive 5-year sales forecast by menu category, update on quick casual, 5-, 10- and 20-year trend analyses, outlook for the future, market share by menu category, and much more. For additional details or to order a copy, please visit www.foodpubs.com or contact Chris Urban at 312-876-0004, ext. 3929 (curban@technomic.com).

Technomic Inc. provides food and foodservice clients with the research, insights and strategic consulting support they need to enhance their business strategies, decisions and results. Its services include category and channel analyses, customer satisfaction studies, opportunity assessments, benchmarking programs and brand equity enhancement.