2015 Top 100: Family Dining segment analysis2015 Top 100: Family Dining segment analysis

Enhancing menus and remodeling units has paid off slightly for leading family-dining and buffet restaurant chains, which often face the challenges of mature brands and have seen little growth in past years.

The largest brands in the category — seven Top 100 Family Dining/Buffet chains and one Buffet chain — managed an average 2.3 percent growth rate in U.S. systemwide sales during the Latest Year. In the Preceding Year, average sales growth for the category had been basically flat.

The average growth in estimated sales per unit, or ESPU, also improved to 1.6 percent in the Latest Year, compared with a mere 0.3 percent average increase in the Preceding Year. In an increasingly competitive environment where quick-service chains are doing more breakfast, family-dining operators have been moving the needle by remodeling units, introducing new menu items, improving service and focusing on their core advantage — the value proposition they offer customers.

“All [of] the mature chains have been finding ways to stay competitive with either new building prototypes or menu evolution,” said Dennis Lombardi, foodservice strategist for retail consulting firm WD Partners in Dublin, Ohio.

The segment posted an aggregate U.S. systemwide sales total of $12.4 billion in the Latest Year, up from $12.1 billion in the Preceding Year.

IHOP, the leader in U.S. systemwide sales with over $2.9 billion, rolled out well-received menu items such as the Criss-Croissants, which are classic croissant dough baked in a waffle iron, and Waffulicious Waffles, which are waffles stuffed with ingredients such as bacon. The chain also introduced new varieties of its signature pancakes and brioche French toast.

Despite a soft economy and substantial weather issues in many areas of the country, IHOP’s strategies continue to find success, according to Julia Stewart, chief executive and chairman of the Glendale, Calif.-based DineEquity Inc., parent company of IHOP and Applebee’s Neighborhood Grill & Bar.

“In terms of the economy, we continue to provide a good value to our guests, both in terms of cost of the total meal and experience,” Stewart said in an e-mail statement to NRN. “And despite increased competition, especially in the breakfast arena, we concentrated on continuing to do what we do best and that is to provide fresh, custom made-to-order menu items in a warm and welcoming environment.”

Denny’s booked U.S. systemwide sales of $2.5 billion in the Latest Year, just behind IHOP. The chain moved to first place for growth in ESPU with a 5.2-percent increase from the Preceding Year.

The Spartanburg, S.C.-based franchisor and operator began a store-remodeling program last year, dubbed Heritage. John Miller, Denny’s president and chief executive, noted in a February statement that consumers were responding to the new look.

Denny’s has done well in attracting the value-conscious customers to all four of its dayparts: breakfast, lunch, dinner and late night, said Mark Smith, an analyst for investment firm Feltl and Co.

“All four dayparts are evenly split,” Smith said. “Although the customer is very value conscious, they’ve been able to drive average tickets higher.”

Waffle House remained the Top 100 Family Dining/Buffet category leader in terms of U.S. number of units, percent unit growth and percent growth in U.S. systemwide sales. The Norcross, Ga., chain posted a 7.2-percent increase in U.S. systemwide sales in the Latest Year. Its unit count went from 1,723 to 1,840 — an increase of 6.8 percent.

Unit counts fell for Denny’s, Golden Corral, Perkins Restaurant & Bakery, and Big Boy/Frisch’s Big Boy.

Golden Corral, the only buffet concept in the group, had the highest ESPU, however the figure was down year over year: $3.5 million in the Latest Year versus $3.6 million in the Preceding Year. Cracker Barrel Old Country Store had the second-highest ESPU with $3.4 million.