Sandwiches and pizza are out. Smoothies and chicken tenders are in.
That’s at least based on a look at limited-service restaurant sales over the past five years, using data from the Technomic Top 500 Chain Restaurant Report.
Over the past five years, for instance, fast-casual chicken sales have grown nearly 87%, thanks largely to the strength of brands like Raising Cane’s and Dave’s Hot Chicken.
On the other end of the spectrum: Quick-service sandwiches, where sales have grown just 6% over that period.
Overall, limited-service restaurants on the Top 500 have grown total sales by 33% over the past five years. But the data shows that consumers have shifted their spending away from some legacy concepts toward newer, hotter brands in different sectors. Or they shifted spending away from full meals to snacks and drinks.
Here’s a look at the sectors and their growth over the past five years:
We probably don’t appreciate Tropical Smoothie Café nearly enough. The smoothie chain has more than doubled in size over the past five years, ultimately justifying its sale to Blackstone earlier this year for $2 billion—a rare, for this year anyway, sale of a restaurant chain at a premium valuation.
The chain has led growth in the “other beverage and snack” category of the quick-service sector.
Cookie chains have surged, led by the ultra-fast growing Crumbl, which has grown by more than 1,800% over the past five years. But there are other, more under-the-radar concepts like Nothing Bundt Cakes, which has grown consistently for years and is 72% bigger than it was in 2019.
And consumers are also buying a wider array of beverages from a growing group of restaurant chains seeking to provide them. For instance, the sector includes some of 2023’s fastest-growing chains such as HTeaO (54%), Swig (39%) and Gong Cha (29%).
Breaking: The chicken business is thriving. Consumers clearly love chicken right now and they really love chicken in limited-service formats.
The fast-casual chicken sector includes some highly successful and fast-growing concepts. Average growth last year alone was 17%, for instance, thanks to chains like Dave’s Hot Chicken, which doubled in size and has grown by a ridiculous 6,800% over the past five years.
But it also includes both Raising Cane’s and Wingstop, two of the best performing large chains in the U.S.
Yet quick-service chicken concepts aren’t to be forgotten, either, even if bone-in chicken chains like KFC and Church’s have struggled. Sales at those chains are up 53% over the past five years, led by Chick-fil-A, up 78%.
On the other hand, sandwiches. The quick-service sandwich sector remains fully dominated by Subway. The Miami-based giant has 20,000 units and accounts for two-thirds of sales in that sector. Its sales last year were down 2% compared with five years ago.
The remaining competitors just aren’t big enough to make up for the loss of more than $200 million in sales.
That, indeed, is one of the challenges of analyzing sectors: Some of them are entirely too dependent on the large chains at the top.
Fast-casual sandwich chains have performed better, thanks to Jersey Mike’s (up 150% the last five years) and chains such as Paris Baguette (up 129%). But the sector’s growth, 26%, was still under average for limited-service restaurants, where sales are up 33% over the past five years.
Where did all the pizza sales go? If there’s one surprise from this data it’s the 18% growth by the quick-service pizza sector.
You know that group, the ones that basically printed money in 2020 and 2021 when everybody was stuck at home ordering pizza delivery?
But that sector’s growth has been overstated. Most of it during those two years took place among four chains: Domino’s, Little Caesars, Papa Johns and Marco’s. If we add another of the five biggest pizza chains, Pizza Hut—which shed units and saw sales fall 1% between 2019 and 2021—average growth was 21% in that period.
The rest of the QSR pizza sector grew just 2% between 2019 and 2021.
For the most part, pizza chains simply lost steam coming out of the pandemic. Average sales growth in the sector was just 3% last year.
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