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Technomic’s Top 500 ranking shows how bad 2020 was for casual dining

Sales plunged by more than a quarter and more than 5% of casual dining chains' units were shuttered as the pandemic put restrictions on dine-in service.
Illustration: Restaurant Business staff / Shutterstock

The nation’s largest casual-dining chains could at least cling to an encouraging fact as they slogged through 2020: Pandemics tend to happen only once a century.

While fast food’s leading brands showed just a 1.9% drop in revenues last year, casual operations on Technomic’s Top 500 sales ranking winced through a downturn of biblical proportions. Sales for the sector plummeted 26.6%, and closures shrank the market by 5.1%--more than double the 2% attrition for the Top 500 chains as a whole.

“The performance gap between limited and full-service was huge,” says Kevin Schimpf, senior manager of industry research for Technomic.  “The sturdy performance of the big drive-thru and delivery giants really offset how poorly full-service chains did.”

Casual chains were the noticeable culprits. For the first time in recent memory, not a single casual brand finished within the Top 20 slots of Technomic’s systemwide sales ranking. The highest achiever was Olive Garden at Number 21, a perch the Darden Restaurants brand landed despite a 20.5% slide in sales.

Even without the commitment most casual chains made to delivery (Olive Garden kept to its policy of declining orders of less than $75), the Italian brand held onto enough business to claim Applebee’s long-held title as the nation’s highest-volume casual chain.  Its systemwide sales totaled $3.41 billion, compared with Applebee’s U.S. intake of $3.10 billion.

Applebee’s, a holding of Dine Brands Global, actually slid two places among casual chains because of its 24.1% drop in sales. Buffalo Wild Wings slipped into the Number 2 spot, at $3.11 billion in intake, by holding its sales decline during 2020 to 15.1%.

Applebee’s arch-rival Chili’s was fourth among casual chains and 25th overall on the Top 500 list with a 13.5% drop in systemwide sales, to $3.08 billion.  Texas Roadhouse finished fifth with $2.69 billion in systemwide sales, a 13.4% decline from 2019.

That decrease was the smallest for any casual chain in the Top 100. The steepest fall was Ruby Tuesday’s drop of 51.5%, a decrease that pushed the venerable brand into Chapter 11 bankruptcy protection.

Even the nationwide giants that led casual dining were handily passed in sales by such multi-regional chains as Panda Express and Jack in the Box.

Schimpf cites a pretty long list” of reasons for the wide divergence in sales between casual dining and the limited-service sector during 2020. First on his rundown: The edge fast food had in embracing off-premise business when dining rooms were closed. That head start had full-service concepts ”playing catch-up to try and recoup some of their sales volumes via carry-out and delivery,” he says.

A breakdown of selected casual-dining data by quarters shows that operational adjustment in action. During the first three months of 2020, sales for casual dining’s big publicly owned brands slipped 7%, reflecting the start of the pandemic, according to Technomic. Sales hit bottom during the next quarter, the first complete one of the crisis, with a 47% decline.

As casual chains found their off-premise footing, sales for the July-through-September period rebounded to within 23% of the year-earlier level. With the kinks worked out, the big brands continued to rebuild their sales during the last three months of the year, pulling within 21% of the level logged in 2019.

Many areas of the country have eased their restrictions on indoor dining, a trend that greatly benefits casual operators. But Schimpf sees a bumpy road still lying ahead. “Even in markets with more relaxed rules on indoor dining,” he says, “customer traffic remains significantly impaired as many guests are still hesitant to resume their pre-pandemic dining behaviors.”

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