Nation's Restaurant News on the Go #76
Nation's Restaurant News
The #1 source of news and business intelligence for restaurant and foodservice industry professionals
Don’t rest on your laurels
Hi,
Joanna Fantozzi, NRN Senior Editor, here. With this year’s NRN Top 500 Restaurants presented in collaboration with Technomic now published (if you have not checked out the data already, be sure to do so!), there are several key takeaways we can glean from the data. Here is one of the most crucial (though simple) pieces of advice: Don’t rest on your laurels.
What exactly do I mean by that? This year’s Technomic data shows us that just because a concept has historically been the biggest in its category, does not mean it always will be. While Starbucks is still the number one coffee chain, the company did not even crack the top 10 coffee chains by unit growth this year. Plus, the coffee giant’s sales numbers were below newer, buzzier brands like 7 Brew, Dutch Bros, Ziggi’s, and Scooter’s Coffee.
As for the pizza category, while Domino’s is still in the top 10 restaurants of 2023, the company only reported modest low-single-digit sales and unit growth. Instead, we could not take our eyes off Marco’s Pizza, whose growth almost doubled Domino’s performance last year.
This lesson could even apply to younger brands. While the dessert category only just began heating up over the past couple of years, it takes more than a short-term trend to solidify long-term success. Just ask Crumbl, whose unit growth far outpaced its sales growth in 2023, and whose momentum seems to be slowing. Crumbl still remains king though, even as more dessert concepts enter the ring every year.
The restaurant industry is clearly more competitive than ever before!
Meet the 2024 Top 500: The biggest restaurant chains in America
At first glance, the Technomic Top 500 appears to show healthy growth for the biggest restaurant brands in the U.S. Sales grew by 7.8% to a robust $424 billion, while unit counts grew by 1.8% to more than 233,000 locations —?the highest rate of new location growth since 2016, according to Technomic.?
Look a bit deeper, however, and you’ll spot signs of trouble for the restaurant industry. The 7.8% sales growth is only slightly higher than the 7.1% average increase in consumer prices, illustrating an ongoing trend that carried over from 2022: sales increasing not from traffic so much as inflation-induced price increases. Indeed, 2023 performance — and, subsequently, 2024’s first quarter —?suggest that the industry has reached a tipping point where consumers are starting to pull back on discretionary spending and trade down to more value-oriented meal options.??
Starbucks stalls as coffee competition heats up
It’s a new era for the coffee category. Whereas once Starbucks (and to a lesser extent, Dunkin’) were the undisputed kings of this segment, new competitors have entered the ring over the past several years.
This year, the coffee category is dominated by upstarts with drive thrus and innovative beverage menus, including:
Pizza players battle for share in a stagnant segment
While the nation’s largest pizza operators enjoyed an unprecedented sales boost during the pandemic, they have since been battling back and forth for share of a slow-growth market.
Consumers appear to have become accustomed to the abundance of options for meal delivery, where the pizza segment was once largely unchallenged. The leading limited-service chains in other segments have captured a growing share of the off-premises market by optimizing the delivery and digital experience for their customers, services they have refined during the last few years.
In 2023, pizza operators generated the slowest sales growth among all of the restaurant segments included in the Top 500, tallying a 3% gain, or less than half the 7.1% menu-price inflation rate for the industry. The four largest pizza chains — Domino’s, Pizza Hut, Little Caesars, and Papa Johns — all posted sales growth in the low single digits last year.
Is there a dessert-restaurant bubble?
This year, there are 32 dessert concepts in the Top 500, though it seems like there is a new viral dessert sensation opening its doors every day. Although the industry is no stranger to sweet trends — remember the cupcake craze of the 2000s? — social media has taken dessert spots to new heights of popularity.
Cookies seem to especially have a certain allure for franchise growth; relatively low-cost builds and operations for franchisees paired with practically-built-in young fanbases hungry for that photogenic concoction of the week.
Crumbl is the king of these super-successful cookie shops. This year, the quick-growing sweets chain entered the top 100 for the first time, with 40.8% unit growth and 10.5% sales growth in 2023. Even though Crumbl is again in the top 10 fastest-growing concepts (by units), the cookie chain’s growth has slowed down. In 2022, the company’s unit count and sales growth had both more than doubled, while in 2023, Crumbl’s unit growth far outpaced its sales growth.
Nation’s Restaurant News Dessert Showdown Finalists Announced!
Round two of Nation’s Restaurant News Dessert Showdown has begun! We’ve narrowed it down to two finalists, Chill-N Nitrogen Ice Cream and Flying Dolly's .
Vote for your favorite in our poll here !
Read more about our Dessert Showdown here .
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Entrepreneur. Let's Talk Womxn & Vermilion Founder. Ex-McKinsey/World Bank. Writer. Speaker. TCN & IWF Member. Triathlete. Policy Wonk. Chess/Squash Enthusiast. Former Trustee/Founder James Beard Foundation Women Program
5 个月Fascinating insights.