Technomic’s 2017 Top 500 Report suggests leading operators are experiencing challenges to build market share
CHICAGO, Mar. 30, 2017–Coming off a strong performance in 2015, Technomic’s Top 500 chain restaurants experienced a deceleration in 2016 with cumulative sales growth checking in at 3.6%, down from 5.2% the prior year. Net unit growth stayed relatively stable at 1.7%, compared to 1.9% in 2015, pointing to declining customer traffic and weakening same-store-sales as the key reasons for the slowdown.
TheTechnomic Top 500 Advanced Chain Restaurant Report, now available for purchase prior to the full report’s publication in mid-April, provides Technomic’s exclusive one-year sales forecast by menu category, an expanded outlook and opportunities section, as well as key themes to help navigate the current industry landscape.
“Today’s foodservice environment continues to create challenges for operators to build market share,” states Darren Tristano, Winsight Chief Insights Officer. “Innovative independent restaurants, emerging regional brands and expansion in the Fast-Casual market have pushed operators to be more nimble, focused and convenient. Big chains continue to see challenges with younger GenZ and Millennial consumer patrons who expect greater social corporate responsibility. Consumers will continue to look for quality and value in their foodservice experiences.”
Full service chains within the Top 500 ranking took the biggest hit in 2016, seeing their total sales growth slow from 4% to 1.4% while unit growth also fell from 1.1% to 0.5%. While these declines can mostly be attributed to the lagging performance of the top casual dining chains, there were still bright spots to be found, with sales increases in fine dining chains by 4.9% and polished casual chains by 4.3%.
Relative to its full service counterpart, limited service fared better in 2016, growing its sales at a cumulative rate of 4.4% with unit growth of 1.9%. Propelling the segment forward was the continued success of fast casual which saw annual sales growth of 8.1%. However, signs of segment maturity are starting to become visible as sales growth for fast casual chains dropped under double digits for the first time in recent history. Quick service chains, who make up over 60% of the Top 500’s total sales volume, chipped in sales growth of 3.7%, down from 4.6% in 2015 while unit growth was unchanged over the past two years at 0.9%.
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Note: The results reported here are preliminary and subject to revision.
Technomic Inc., a Winsight company, delivers a 360-degree view of the food industry. It impacts growth and profitability for clients by providing consumer-grounded vision and channel-relevant strategic insights. Its services range from major research studies and management consulting solutions to online databases and simple fact-finding assignments. Its clients include food manufacturers and distributors, restaurants and retailers, other foodservice organizations, and various institutions aligned with the food industry. Visit Technomic at technomic.com.
About Winsight, LLC
Winsight LLC is a recognized leader in business-to-business media and information services for the convenience-retailing, foodservice and grocery industries. Winsight has an extensive media portfolio, including five publications: CSP, Restaurant Business, FoodService Director, Convenience Store Products, and Winsight Grocery Business. Winsight also offers a suite of digital products, including websites, e-newsletters, webinars, video products, mobile and tablet apps, and custom marketing solutions. In addition to more than 12 major EduNetworking conferences and advisory meetings, Winsight also produces seven exclusive, large-scale executive-level conferences: Restaurant Leadership Conference, Global Restaurant Leadership Conference, Outlook Leadership Conference, Convenience Retailing University, FSTEC, MenuDirections and Restaurant Directions. In 2015, Winsight acquired Technomic Inc., a provider of primary and secondary market information and advisory services for the food industry. For more information on Winsight and its brands, go to www.winsightmedia.com.