SCOTTSDALE, Ariz.--(BUSINESS WIRE)--The 25th annual edition of the Chain Restaurant Industry Review by GE Capital, Franchise Finance shows that Americans’ dining habits have changed dramatically over the past quarter century. At the same time, the restaurant industry itself is growing increasingly complex, with fierce competition, technological challenges and rising labor and commodity costs.
Twenty-five years ago, sandwich chains like McDonald’s and Burger King dominated the industry. Within the 25 largest restaurant chains, the sandwich segment generated 63.5 percent of sales. Most people ate meals at home and quick service restaurants (QSRs) offered quick, inexpensive food when needed. In comparison, QSR sandwich chains on the top 25 list comprised 54.5 percent of sales in 2014.
Today, grocery store spending is flat with consumers eating away from home more and more, but they’re not limiting themselves to traditional meal times. With people grazing throughout the day, new dining options are emerging. Between QSRs and full-service restaurants (FSRs) is the wildly successful fast-casual category, which emphasizes quick service and lower prices than formal sit-down restaurants, plus higher-quality food and dining experiences.
“It’s the nature of restaurants to innovate,” said Kimberly Savilonis, senior vice president of strategic marketing for GE Capital, Franchise Finance. “The lines separating traditionally distinct restaurant segments are blurring. For customers, the result is a significantly enhanced experience.”
“The most successful operators over the next 25 years will be those that continue to evolve their businesses to stay in tune with customer preferences,” she added.
To read more of the Chain Restaurant Industry Review, please visit http://www.gerestaurantreview.com.
Top 100 U.S. Chains
The Chain Restaurant Industry Review includes GE Capital’s analysis of the top 100 chains in the U.S.
Interestingly, the fastest-growing brands over the past 25 years aren’t those with double-digit same-store sales (SSS) growth year after year but rather those with steady growth that consistently perform well and minimize losses while adapting to changes during down cycles, Savilonis noted.
“The strongest brands continue to be those that differentiate themselves through customer contact such as social media, broaden their customer base to embrace Millennials, offer healthier choices and better service, or create unique experiences,” she said.
Continuing post-recession trends, QSRs outperformed FSRs last year. QSR SSS growth has been positive for almost five consecutive years (up 3.4 percent in 2014), while FSR SSS have been positive for only three consecutive quarters (up 0.6 percent in 2014). Chains in the snack and fast casual segments had the largest growth in system-wide sales.
The data provided herein are excerpted from the 2015 annual Chain Restaurant Industry Review, where specific citations are provided, and subject to the limitations and disclaimers contained therein.
Customers of GE Capital, Franchise Finance should contact their representative for a copy of the Chain Restaurant Industry Review. Others can access portions of the report online at http://www.gerestaurantreview.com.
About GE Capital, Franchise Finance
With more than 30 years of experience and $6 billion in assets, GE Capital, Franchise Finance is a leading lender to the U.S. franchise finance market. It specializes in financing mid-market, multi-unit operators in the restaurant and hospitality industries. Its team of industry experts helps them realize their individualized growth plans. GE Capital, Franchise Finance customers also receive access to its proprietary industry research and cutting-edge digital tools. For more information, visit www.gefranchisefinance.com. GE Capital offers customers around the globe an array of financial products, services and insights to help them grow their businesses.
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