Thriving in a crowded segment
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Can you give some detail on average unit volumes?
Our average unit volumes are on the rise. We’ve been about $1 million a year, but this year’s vintage is averaging $1.2 million to $1.3 million, and they’ve been climbing. We’re comping well in the 4-ish-percent range this year. We don’t have any stores losing money, and the brand’s working very broadly across the U.S.
It’s rare to hear about new fast-casual burger concepts opening these days. There’s a lot more activity in other food categories within the segment. Does that indicate a cooling of the once-hot better burger trend?
We just had our sixth anniversary, and our strategy was to get as close as possible in this time frame and to make it less attractive for other people to start and compete with a burger concept. I think there will be two-to-three leaders in fast casual in every food category, whether that’s pizza, Asian, burritos, bakery/café or burgers. There will only be two or three playing at the national level, and then some regional folks.
With what the market structure is, we’re clearly one of the leaders — if not the leader — in fast-casual burgers, and consumers continue to be excited. We’re stealing market share from all the logical suspects. I think as an investor starting up from scratch, when you see where we are and where some other people are, it would be somewhat daunting to do that on any kind of scale. So you’re just seeing the market structure start to play out in burgers. And, from Smashburger’s perspective, it’s good.
Contact Lisa Jennings at firstname.lastname@example.org.
Follow her on Twitter: @livetodineout