It’s that time of year again, when we all polish up our crystal balls in an attempt to predict what the New Year might have in store for us. That task may be more daunting than usual, given the curveballs 2024 has thrown at us.
But we just happen to have Technomic’s crystal ball, which is made out of all sorts of data points. Technomic’s annual Top 500 list will officially be released in the spring, but those data points are already starting to crystalize some forecasts based on fourth-quarter metrics. Here’s a look at some 2025 predictions from Technomic Ignite Company.
Chipotle leapfrogs
Chipotle has been well positioned in the industry for several years and, in fact, the fast-casual chain has experienced just one quarter of negative same-store sales comps since 2018 and that was in the throes of the pandemic. While much of the industry experienced eroding traffic numbers and flat-ish sales in 2024, Chipotle touted its value proposition to gain customers who were trading down from casual dining and up from quick-service. Simultaneously, it generated a 15% year-over-year sales increase through Q3. Its momentum isn’t expected to slow anytime soon – despite a chief executive officer change in August – as the company recently announced accelerated unit growth and broader international ambitions.
Because of this consistently strong performance, Chipotle is predicted to jump past both Burger King and Subway into the No. 7 spot overall on Technomic’s Top 500 report when it’s released in the spring. The chain finished 2023 at No. 9.
Notably, Burger King finished 2023 with 6,778 domestic units, Subway finished the year with 20,170 domestic units, and Chipotle finished the year with 3,371 units.
Full-service retrenchment
This year has been tough for full-service concepts in particular and we’ve seen mass closures – or announcements about impending mass closures – from several players including Denny’s, O’Charley’s, Hooters, Applebee’s, and more. Red Lobster and TGI Friday’s have also contracted while each navigating Chapter 11 bankruptcies.
Several factors have created this reality, including changing unit economics (labor costs are up about 20% since 2020, while food and occupancy costs have also jumped double digits) and category saturation. The rise in the fast-casual category has also thrown a wrench into casual dining, offering more choices (and perceived value) for consumers who have become far more discerning about their discretionary spending.
As such, Technomic Ignite predicts that the footprint of full-service chain restaurants in the Top 500 will shrink in 2025, marking the first time since 2020 that the category will experience a net contraction in restaurant count.
Chicken continues to fly
The chicken category has driven much of the overall industry’s growth of late thanks in large part to younger consumers’ preference for the protein, its versatility, and its health(ier) halo. There are also more options from which consumers can choose – staggeringly more.
In addition to the traditional players like Chick-fil-A, Popeyes, KFC, Bojangles, and Church’s Texas Chicken, there are also high-growth concepts like Raising Cane’s and Wingstop, both of which are projected to surge into the top 25 this year, buoyed by double-digit sales growth in 2024. Raising Cane’s finished 2023 at No. 28, while Wingstop finished at No. 32.
Don’t count out the up-and-comers like Dave’s Hot Chicken, Zaxby’s, and Slim Chickens, all of which are experiencing remarkable growth. Technomic forecasts chicken chains to achieve a sixth-consecutive year of cumulative double-digit sales growth in 2025.
The burger category remains sluggish
Meanwhile, burger chain sales growth is expected to be sluggish with a 1.8% increase compared to 2023. Bellwether brands like McDonald’s, Burger King, and Wendy’s have all seen low single-digit sales growth in 2024 through Q3.
According to Technomic, burger chain sales overall grew by over 7% in 2023 and a wildcard to close-out the year will be how McDonald’s performs following its E. coli outbreak in late October, which has since been declared over by the Centers for Disease Control and Prevention.
The industry overall
Overall, Top 500 chain sales are currently projected to increase by 4.2% in 2025, according to Technomic Ignite, to a total of more than $440 billion in 2024. While that number looks fairly robust on paper, with menu inflation lingering around 4% for most of 2024, chain sales growth will essentially be flat on a real basis.
The Technomic Top 500 forecast is produced using data from Technomic Ignite Company. These predictions are preliminary and may be subject to adjustment.
Contact Alicia Kelso at [email protected]
