Technomic Sees Slowing Sales, Unit Growth at Top 500 Chains

Domestic system-wide sales for the top 500 rose $7.6 billion to an estimated $230.2 billion in 2008.

Last year's growth, some of which can be attributed to higher menu prices, came amid a recession that has consumers cutting back on meals away from home. At the same time, those who still dine out have been favoring value meals and other promotions as they try to find less expensive alternatives.

"Restaurant operators faced a host of challenges, including cost pressures followed by declines in consumer dining demand," Technomic president Ron Paul said.

The sales increases came from publicly held limited-service eateries, including bakery-cafe Panera Bread Co., coffee chains such as Starbucks Corp. and Peet's Coffee & Tea Inc., and hamburger chains such as Burger King and McDonald's.

Privately held companies such as Subway, Panda Express, Five Guys Burgers and Fries, and Jimmy John's Gourmet Sandwich Shop posted some of the industry's fastest rates of sales growth, according to Technomic.

Sales in the Mexican, steak and seafood categories declined 1.8 percent, 0.7 percent and 0.4 percent, respectively.

Last year, the weak U.S. dollar fueled a 13.4 percent rise in international sales at the top 500 restaurant chains, Technomic said. International sales growth was 7.9 percent in 2007, according to the research firm.

As the economic slowdown dents demand, several restaurant companies are opening fewer new outlets. "Many chains scaled back their U.S. unit expansion efforts, growing units by just 1.8 percent" in 2008 compared with 2.6 in 2007, Paul said. International unit growth rose 9.9 percent in 2008.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

Despite their complaints, customers keep flocking to Chipotle

The Bottom Line: The chain continued to be a juggernaut last quarter, with strong sales and traffic growth, despite frequent social media complaints about shrinkflation or other challenges.

Operations

Hitting resistance elsewhere, ghost kitchens and virtual concepts find a happy home in family dining

Reality Check: Old-guard chains are finding the alternative operations to be persistently effective side hustles.

Financing

The Tijuana Flats bankruptcy highlights the dangers of menu miscues

The Bottom Line: The fast-casual chain’s problems following new menu debuts in 2021 and 2022 show that adding new items isn’t always the right idea.

Trending

More from our partners