This is part of Nation’s Restaurant News’ annual Top 100 report, a proprietary census ranking the foodservice industry’s largest restaurant chains and companies by sales and unit data, among other metrics.
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More targeted snack-based, specialty and ethnic brands won in the battle for market share this year, leaving more traditional casual-dining, family-dining and quick-service burgers and sandwiches to lose ground, based on Top 100 market share data.
Seven of the 12 segments in this year’s Top 100 showed market share growth, including Bakery-Cafe, Beverage-Snack, Chicken, LSR/Specialty and LSR/Mexican.
A chain’s market share is based on its U.S. systemwide sales as a percentage of its Top 100 industry segment's total sales, while segment market share reflects a segment’s aggregate sales as a percentage of all Top 100 sales.
The largest segment gainer was the LSR/Mexican category, which added 0.4 percentage points in the Latest Year, to represent 6.1 percent of aggregate Top 100 sales.
Leading that group was Chipotle Mexican Grill, which captured 28.7 percent of sales in the LSR/Mexican segment, rising from 25.1 percent the Preceding Year, and eroding the share held by the largest chain in terms of total sales, Taco Bell. The Yum! Brands Inc. division saw segment market share decline to 57.9 percent of total segment sales, compared with 61.4 percent a year ago.
That’s not surprising, given that Chipotle posted a total sales growth rate of more than 27 percent in the Latest Year, leading the category for sales growth.
In a report this year, securities analyst David Tarantino of Baird Equity Research said Chipotle’s momentum is sustainable “as long as the company can continue to execute well on delivering an excellent guest experience, enabled by a strong people culture, and providing food that resonates with customers, particularly Millennials, who desire higher-quality experiences.”
The Beverage-Snack and Chicken categories also claimed slightly larger shares of the Top 100 pie.
Starbucks maintained its solid lead within the Beverage-Snack segment, with its market share climbing from 57.4 percent in the Preceding Year, to 58.1 percent in the Latest Year. In terms of systemwide domestic sales, the Seattle-based coffeehouse operator climbed past Subway as the second-largest chain, second only to McDonald’s.
Within the Chicken segment, top sales leader Chick-fil-A continued to gain segment share, capturing 31.9 percent of sales, up from 30.5 percent in the Preceding Year. The gains were largely at the expense of KFC, which slid from 25.7 percent of segment sales in the Preceding Year to 23.5 percent in the Latest Year.
This year, KFC launched a $185 million brand overhaul with plans for restaurant remodels and a rededication to the Original Recipe Chicken, moves that some see as an attempt to win back the Chicken category throne.
Yum! Brands CEO Greg Creed recently told analysts that the response to the ad campaign has been “80 percent positive and 20 percent hate it.” But at least they have an opinion, he said, and it got people talking.
“You can market to love or hate,” he said. “You cannot market to indifference.”
Yet even in segments that lost share as a whole, there were clear winners.
Within Casual Dining, Buffalo Wild Wings added market share, with 8.3 percent of segment sales in the Latest Year, compared with 7.5 percent in the Preceding Year. Texas Roadhouse, The Cheesecake Factory and BJ’s were also among those who edged up in market share rankings this year. In Family Dining, IHOP, Denny’s and Waffle House grew their share of sales, stealing from players like Cracker Barrel Old Country Store, Golden Corral, Bob Evans Restaurants, Perkins Restaurant & Bakery and Big Boy/Frisch’s.
Just about all players in the LSR/Burger segment grew market share in the Latest Year. The notable exception was McDonald’s, which slipped from 49.3 percent of segment sales to 48 percent.
Within the LSR/Sandwich segment, Arby’s, Jimmy John’s Gourmet Sandwiches, Firehouse Subs, Jersey Mike’s and McAlister’s Deli grew their respective shares at the expense of category leader Subway, which slid to 63.3 percent in the Latest Year, after accounting for 65.7 percent of segment sales in the Preceding Year.
Also underscoring the theme of younger brands stealing share from more traditional chains, the Pizza segment sales leader took a hit. Pizza Hut’s market share dropped to 31.6 percent of segment sales in the Latest Year, compared with 34.2 percent a year earlier, while competitors like Domino’s, Little Caesars, Papa John’s, Papa Murphy’s and Round Table Pizza posted increased share.
Contact Lisa Jennings at [email protected].
Follow her on Twitter: @livetodineout
