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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An improving restaurant industry has helped drive many chains’ unit-level sales higher in the Latest Year, based on Nation’s Restaurant News Second 100 data.
For Second 100 concepts, estimated sales per unit, or ESPU, grew 2.5 percent, nearly double the 1.3-percent growth from the Preceding Year. Likewise, larger chains in the Top 100 averaged unit-level growth of 3 percent, which was more than double the 1.2-percent growth in the Preceding Year.
The numbers reflect a broadened improvement in the industry last year, as more sectors saw improving same-store sales performance, particularly as the year went on. The industry raised prices in response to higher commodity costs, and some concepts have trimmed underperforming units. Consumers are also in better shape, with rising employment and lower gas prices.
Among chains in the Second 100, growth was particularly evident among beverage chains. Smaller ESPU growth was seen among upscale concepts, but mostly because any increase is based on such a large unit volume.
Smoothie concepts seemed to have a particularly good year in the Latest Year.
Smoothie King, which had 590 locations at the end of the Latest Year, saw its ESPU grow 11.7 percent. The New Orleans-based chain now averages more than $400,000 per location. Tropical Smoothie Café, the Atlanta-based brand with about 400 locations, saw same-store sales grow last year, and its unit volumes rose along the way. Its ESPU rose 10.1 percent last year.
In both cases, the growth came on top of improving sales the Preceding Year — suggesting that consumers are ordering more smoothies and the chains’ menu and innovation efforts are resonating customers.
The Second 100 universe includes two of the highest-volume restaurant chains in the industry. Del Frisco’s Double Eagle Steakhouse averages $14.4 million per unit – although that fell slightly, by 0.5 percent, in the Latest Year. Mastro’s Steakhouse/Ocean Club was right behind, with an estimated unit volume of $13.7 million, which rose 0.3 percent in the Latest Year.
Houston’s was third, at $9.4 million per location, followed by Rainforest Café with $9 million. The newly public Fogo de Chão books an estimated $8.5 million per location. Fogo’s ESPU rose nearly 7 percent in the Latest Year. The concept held its initial public offering of stock last month, raising about $88 million in one of the many successful debuts this year.
Steak chains have generally performed well and part of that comes from menu price increases. Skyrocketing beef prices in 2014 led many chains to raise prices last year, and unit volumes reflect that. Consumers were also willing to pay those prices, particularly at more upscale chains where business spending accounts play a large role.
For example, Saltgrass Steak House’s ESPU grew 8.8 percent, to $4.9 million. Fleming’s Prime Steakhouse & Wine Bar’s ESPU was $4.2 million, and Morton’s the Steakhouse totaled $4.1 million – while both saw ESPU growth of 3 percent.
Upscale-casual concepts saw some growth, too. Houston’s ESPU grew more than 4 percent, J. Alexander’s ESPU grew 6 percent, and Seasons 52 ESPU rose 4.1 percent.
Italian-menu-based chains struggled, however. Bravo! Cucina Italiana’s ESPU fell 5.6 percent, to $3.2 million, while its sister concept, Brio Tuscan Grille, saw a decline of nearly 5 percent, to $4.1 million. Some Italian-branded concepts that reported ESPU growth did so at least in part because of unit closures. Carino’s Italian filed for bankruptcy during its Preceding Year and closed 19 under-performing units. The stronger units remaining had 12.4-percent higher estimated sales per unit in the Latest Year, at $2.2 million.
Buffet chains also had a tough year. Both Old Country Buffet, with $2.4 million in unit volume, and Home Town Buffet, with $2.4 million per unit, each saw their ESPU fall more than 6 percent.
Contact Jonathan Maze at [email protected]
Follow him on Twitter: @jonathanmaze
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