Top 75 limited-service burger chains feature emerging brands, ‘better burgers’

The fast-casual boom has continued to make its impact felt in the limited-service burger segment, as more than half of the Top 75 burger chains are now fast-casual brands. The Top 75 limited-service burger chains saw their sales grow 1.6 percent last year, reaching $65 billion.

“This is an interesting time in the burger segment,” says Technomic EVP Darren Tristano. “We are seeing very high growth rates from smaller brands and a steady stream of new ‘better burger’ entries making their presence felt, while at the same time some of the larger brands are struggling to maintain their footholds.”

Fastest-Growing LSR Burger Chains Ranked by % Unit Growth*
Chain Name 2010 U.S. Units % Unit Change
Shake Shack 7 133.3
Smashburger 93 116.3
Mooyah Burgers & Fries 17 54.5
Five Guys Burgers and Fries 737 34.7
Freddy’s Frozen Custard & Steakburgers 46 27.8
Habit Burger Grill, The 33 26.9
Bobby’s Burger Palace 5 25.0
Jake’s Wayback Burgers 24 20.0
Counter, The 26 18.2
Fatburger 90 13.9
Total 1078 48.9
*Excludes chains under $10M in annual sales

Tristano also points out that while fast-casual concepts now represent the majority of these leading burger chains, they are still only 2.6 percent of total Top 75 burger sales. “This segment contains some of the real giants of the industry, so even a brand growing 150 percent per year is going to be dwarfed in pure dollars by McDonald’s, Wendy’s and Burger King, which own 75 percent of limited-service burger sales in the U.S.”

To assist operators, suppliers and others aligned with the foodservice industry, Technomic has developed the Top 75 Limited-Service Burger Chains Restaurant Report. The report analyzes the segment, identifying top performers by sales and units, and outlines trends that drive success for quick-service and fast-casual burger chains.

Interesting findings include:

  • Even as burger restaurants were opened, the segment’s rate of expansion continued to slow. Unit counts increased .2 percent, but the growth from the past three years was .5 percent, .7 percent and .9 percent respectively. However, the segment’s expansion has consistently outpaced the LSR industry as a whole, as well as the restaurant industry.
  • “Better burger” concepts are benefiting from focused menus, as many quick-service chains in the segment are expanding their menus to include breakfast, specialty coffee and broader entrées. At the same time, fast-casual burger chains that offer adult beverages are successfully competing against casual-dining chains, at a lower price point.
  • McDonald’s is the clear driver of sales growth within the category, offsetting declines by other large burger chains, while unit growth is primarily coming from emerging brands as they continue to take share from both limited-and-full-service restaurants.

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