Established restaurant brands are fiercely competing with new concepts for market share while ingredient costs are rising, said GE Capital, Franchise Finance. And although diners are spending more during each visit, consumer traffic declined over the past year.
Despite these challenges, the overall health of the restaurant industry remains strong, according to the 24th edition of the Chain Restaurant Industry Review, published by GE Capital.
Nominal restaurant sales rose 3.1 percent to $440.2 billion in 2013. Moreover, sales are expected to continue this upward trend, with an increase of 3.6 percent anticipated in 2014. Same store sales decreased 0.1 percent, but the average amount of each visitor’s check increased 2.6%.
“Overall restaurant trends are improving, but we know the competitive environment is heating up and the U.S. economic situation is still challenging for some pockets of the population,” said Kimberly Savilonis, senior vice president of strategic marketing. “However, we recognize that there are strong operators who work hard every day to grow their businesses, and we’re pleased to continue building long-standing relationships with the middle market.”
Top 100 U.S. Chains
The Chain Restaurant Industry Review includes GE Capital’s analysis of the top 100 chains in the U.S. At $218 billion, their system-wide sales represent 49.5 percent of all restaurant sales. In general, chain restaurants accounted for 44.5% of total U.S. restaurants—or 633,043 units—in 2013.
Sales among those on the list grew 3.5 percent year-over-year, outperforming the overall restaurant industry. Quick service restaurants (QSRs) grew faster than full service restaurants (FSRs), continuing the trend seen over the past six years.
There are two new additions to the list this year—Jersey Mike’s and Taco John’s.
SmartChart™ Tool Analyzes Restaurant Performance
To generate the Chain Restaurant Industry Review, GE Capital evaluated trends and analyzed the current state of the U.S. restaurant industry using multiple tools, including more than 25,000 individual unit-level financial statements as well as the SmartChart™ tool, its digital solution for financial analytics and site selection targeted at middle market operators.