This is part of Nation’s Restaurant News’ annual Second 100 report, a proprietary census ranking restaurant brands Nos. 101-200 by U.S. systemwide sales and other data. This special report focuses on a smaller, more growth-oriented universe than the Top 100 report.
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Second 100 LSR/Burger and Pizza chains led market share gains in the Latest Year, but the increases were by no means record breaking.
The LSR/Burger segment gained 0.4 percentage points, climbing to 7.5 percent of the aggregate Second 100 sales of $24.5 billion. Within the segment, The Habit Burger Grill realized the largest gains, rising 2.4 percentage points, to 9.6 percent of segment sales, from 7.3 percent the Preceding Year.
Habit Restaurants Inc., the Irvine, Calif.-based parent to the chain, went public in November 2014, and was the fastest-growing Second 100 chain, with a 45.9-percent increase in U.S. systemwide sales in the Latest Year, to $175.7 million.
Its core offering was named best-tasting burger by Consumer Reports in 2014, beating larger brands like In-N-Out Burger and Five Guys Burgers and Fries.
Dennis Lombardi, foodservice strategist at WD Partners, said Habit Burger is performing on all cylinders, from its concept to its execution and choice of locations.
“You’ve got a menu that is certainly diversified enough to eliminate a veto vote, but clearly focused enough to allow for high-quality output on a consistent basis,” Lombardi said. “You’ve got enough craveable things on their menu to create that urge to go back. And they’ve got, from what I can tell, a good service experience from a consumer standpoint. When you’re hitting on all cylinders, a lot of good things happen.”
In February, Longbow Research analyst Alton Stump said in a report that Habit Burger had a better growth projection than fast-growing, and also newly public, Shake Shack.
“We are confident [that] Habit Burger has a superior near- and long-term growth story versus Shake Shack from both a new store and same-store sales perspective,” Stump wrote, according to Benzinga.
Freddy’s Frozen Custard & Steakburgers wasn’t far behind in that segment, with a 2.2-percentage point increase in market share, to 11 percent of segment sales. Smashburger pulled out a 1.1-percentage point increase in market share, to 14.1 percent of sales.
However, LSR/Burger leader Rally’s Hamburgers, along with Fuddruckers, Braum’s Ice Cream and Dairy Store, Johnny Rockets and A&W All American Food, saw their respective segment market share decline. Losing share, however, does not necessarily indicate a loss in sales. Of those chains, only Fuddruckers booked a decrease in U.S. systemwide sales in the Latest Year.
Within the Pizza segment, which grew its share of aggregate Second 100 sales to 6.8 percent, from 6.4 percent the Preceding Year, all but two chains gained ground within the inner-segment rivalry. Segment leader Chuck E. Cheese’s saw market share slip nearly 3.5 percentage points in the Latest Year, to 22.2 percent of segment sales. The brand’s U.S. systemwide food-and-beverage sales fell 4.7 percent.
Godfather’s Pizza's market share declined 1.4 percentage points during the Latest Year, to 14.6 percent of segment sales, despite a slight uptick in U.S. systemwide sales.
The market share of the LSR/Mexican segment remained flat, with 5.9 percent of overall Second 100 sales.
Within the LSR/Mexican segment, Café Rio Mexican Grill saw the strongest increase, with a 1.5-percentage point increase in market share, followed by moderate gains by segment leader Taco John’s, along with Rubio’s Fresh Mexican Grill and Taco Cabana. Baja Fresh Mexican Grill had a decline in market share of 1.8 percentage points, to 13.7 percent of sales.
The biggest market share declines were seen in the LSR/Sandwich and Buffet/Grill-Buffet segments.
The LSR/Sandwich segment saw market share fall 0.5 percentage points, to 7.1 percent of Second 100 sales, due largely to Quiznos’ weak performance. The segment leader lost 8.7 percentage points in market share in the Latest Year, declining to 19.6 percent of segment sales. Quiznos' unit count dropped to 985 locations in the Latest Year, from 1,419 units in the Preceding Year. The brand’s U.S. systemwide sales fell 32.7 percent, to $342.2 million, as the Denver-based chain attempted a turnaround.
Other LSR/Sandwich chains raked in market share gains. Charley’s Grilled Subs/Charleys Philly Steaks took the lead, with a 2.5-percentage point increase, to 16.1 percent of segment sales. Potbelly Sandwich Shop wasn’t far behind, with a 2.4-percentage point gain, to 19.4 percent of sales.
The Buffet/Grill-Buffet category slipped to 4.6 percent of Second 100 sales, from 5 percent the Preceding Year. Segment leader Home Town Buffet saw market share decline 0.6 percentage points, to 23 percent, but Old Country Buffet reported a market share decrease of 0.8 percentage points, to 19 percent. Sizzler, on the other hand, gained 1.1 percentage points in the Latest Year, to 20.9 percent of sales.
Contact Lisa Jennings at [email protected]
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