Starbucks surges, Subway stumbles in restaurant report

by Monica Watrous
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Starbucks
Starbucks had 12.8% sales growth in 2015.

CHICAGO — Fast-casual continues to lead restaurant industry growth, posting nearly twice the sales increase of any other dining segment last year, according to a new report from Technomic Inc., Chicago.

The restaurant industry’s 500 biggest brands in the United States collectively grew sales by 4.9% to $288 billion, which compared with growth of 4.2% in 2014. Limited-service chains grew sales 5.5% to $212 billion, outpacing full-service, which saw cumulative sales rise 3.5% to $76 billion. The top 500 chains increased unit count by 2.1% to more than 223,000 locations during the year.

Darren Tristano, Technomic
Darren Tristano, president of Technomic, Inc.

“While the performance of the top 500 chains showed moderate improvement over the prior year, consumers clearly favored patronage of fast-casual and fast-food restaurants,” said Darren Tristano, president of Technomic, Inc. “In full service, family-style restaurants succeeded on affordable value, upscale casual-dining chains appealed to more affluent consumers, and many traditional casual-dining chains appeared to be squeezed in the middle with weaker performance.”

Subway meal
Subway’s sales slipped 3.4% in 2015.

Among fast-food players, all-day breakfast helped McDonald’s return to positive sales growth in 2015, with an increase of 1.1%. Starbucks had 12.8% sales growth, followed by Taco Bell at 8.2% and Burger King at 4.2%. In its second consecutive year of declines, Subway’s sales slipped 3.4%, while such sandwich shop competitors as Arby’s and Jersey Mike’s came out ahead, Technomic said.

In the fast-casual segment, Panera Bread, Panda Express and Jimmy John’s led the pack. Contributing to the segment’s strong results were fast-casual pizza chains such as Blaze Pizza (up 205% over 2014), MOD Pizza (up 182%) and Pieology Pizza (up 67%), and health-focused concepts, including Freshii, Sweet Green and Zoes Kitchen. Among limited-service segments, Asian noodle concepts grew 10%, coffee shops and cafes rose 10%, and chicken concepts climbed 9%.

Buffalo Wild Wings
Buffalo Wild Wings led the sports bar and wing-centric casual-dining restaurants.

Within the full-service segment, casual dining steakhouses produced a 6.2% increase in sales, and fine-dining steak concepts sizzled with 5.6% growth over the prior year. Also faring well were sports bar and wing-centric casual-dining restaurants, led by Buffalo Wild Wings, Miller’s Ale House and Twin Peaks.

“The rebound of some key industry players, coupled with the continued fast-casual boom (resulted) in a strong year for Technomic’s Top 500,” Mr. Tristano said.
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