Applebee's once again topped the Casual Dining segment in this year's Top 100 report.

Casual Dining in 2013 continued to endure its share of sluggish growth in an extended hangover from the recession. Total U.S. systemwide sales for the 26 Casual-Dining chains in this year’s survey rose an anemic 2.3 percent, to $37 billion from $36.2 billion in the Preceding Year.

“It was not a particularly good year,” said Malcolm M. Knapp, president of New York-based Malcolm M. Knapp Inc. and publisher of the Knapp-Track report on casual-theme and dinner-house segment sales. That group in 2013 reported negative comps in nearly half of the months, he said.

The general economic hurdles were heightened by the federal government’s furlough of workers when Congress failed to pass a budget in the fall, he said.

“There was some pretty bad stuff that happened last year,” Knapp noted, adding that most workers were hit in January 2013 with increases in the Federal Insurance Contributions Act, or FICA, tax, and gasoline prices spiked.

Despite that, the segment and its high-volume units remained a dominant force in the industry. Casual-Dining chains make up more than a quarter of the 100 brands in this year’s Top 100.

The top 10 Casual-Dining leaders ranked by U.S. systemwide sales remained much the same in the Latest Year, compared with the Preceding Year, with top three Applebee’s Neighborhood Grill & Bar, Olive Garden and Chili’s Grill & Bar maintaining their respective win-place-show positions. 

Data

• Top 100 Rankings and Results

Some changes were seen in the next three spots, with Buffalo Wild Wings Grill & Bar pushing Red Lobster out of the No. 4 position and the seafood concept — which parent Darden Restaurants Inc. is in the process of selling — dropping to No. 6. Outback Steakhouse moved up a spot to No. 5.

TGI Fridays held its No. 7 position. Texas Roadhouse beat out The Cheesecake Factory in their swap at the No. 8 and No. 9 spots, and LongHorn Steakhouse edged its way into No. 10.

“A lot of guys just aren’t going fast enough to market with their initiatives,” Knapp said. “They just aren’t as relevant as the top guys, the ones that are outperforming.”

Those outperforming brands produced sizable changes in the Top 100’s rankings for U.S. systemwide sales growth.
Darden’s Yard House elbowed its way to the No. 1 spot, with a 20.1-
percent increase in systemwide sales, and pushed out value-
oriented Cheddar’s, which fell to No. 3 with 12.4-percent systemwide sales growth. Buffalo Wild Wings was No. 2, with systemwide sale growth of 13 percent.

Part of the sales growth was built on strong company cultures, Knapp said.

“You need a sense at the store level that team members are family,” he said. “They work better together and things flow better. They are also training all the time.”

Growth in unit expansion within the category saw two big standouts, which switched positions in the Latest Year: Yard House was No. 1, with 18.2-percent growth in number of units, and Cheddar’s dipped to No. 2, with 16.3-percent growth in unit count. BJ’s Restaurant & Brewery stayed at No. 3, with 12.3-percent unit growth from the Preceding Year.

The 26 Casual-Dining players in this year’s Top 100 represented 11,755 U.S. units, up from 11,561 in the Preceding Year.

Applebee’s, with 1,861 units; Chili’s, with 1,269 units; and Buffalo Wild Wings, with 978 units, led the segment in year-end number of U.S. restaurants.

This year holds promise, Knapp said, partially due to job growth.

“The second half of the year should be better,” Knapp said, noting that economic activity is picking up. “So far this year, we’ve added about 203,000 jobs per month in the first five months,” he said. “When you have jobs, you have economic activity.”

However, per capita incomes aren’t rising measurably, and single-family home construction hasn’t picked up, he said.

“We still have a serious number of people who are unemployed or underemployed,” he said. “We’ve kind of hollowed out the middle class, which was always the stable for casual dining.” 

By the numbers

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Contact Ron Ruggless at [email protected].
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