Starbucks surges, Subway stumbles in restaurant report

Fast-casual continues to lead restaurant industry growth, posting nearly twice the sales increase of any other dining segment last year, according to a new report from Technomic Inc., Chicago.

The restaurant industry’s 500 biggest brands in the United States collectively grew sales by 4.9% to $288 billion, which compared with growth of 4.2% in 2014. Limited-service chains grew sales 5.5% to $212 billion, outpacing full-service, which saw cumulative sales rise 3.5% to $76 billion. The top 500 chains increased unit count by 2.1% to more than 223,000 locations during the year.

“While the performance of the top 500 chains showed moderate improvement over the prior year, consumers clearly favored patronage of fast-casual and fast-food restaurants,” said Darren Tristano, president of Technomic, Inc. “In full service, family-style restaurants succeeded on affordable value, upscale casual-dining chains appealed to more affluent consumers, and many traditional casual-dining chains appeared to be squeezed in the middle with weaker performance.”

Among fast-food players, all-day breakfast helped McDonald’s return to positive sales growth in 2015, with an increase of 1.1%. Starbucks had 12.8% sales growth, followed by Taco Bell at 8.2% and Burger King at 4.2%. In its second consecutive year of declines, Subway’s sales slipped 3.4%, while such sandwich shop competitors as Arby’s and Jersey Mike’s came out ahead, Technomic said.

In the fast-casual segment, Panera Bread, Panda Express and Jimmy John’s led the pack. Contributing to the segment’s strong results were fast-casual pizza chains such as Blaze Pizza (up 205% over 2014), MOD Pizza (up 182%) and Pieology Pizza (up 67%), and health-focused concepts, including Freshii, Sweet Green and Zoes Kitchen. Among limited-service segments, Asian noodle concepts grew 10%, coffee shops and cafes rose 10%, and chicken concepts climbed 9%.

Within the full-service segment, casual dining steakhouses produced a 6.2% increase in sales, and fine-dining steak concepts sizzled with 5.6% growth over the prior year. Also faring well were sports bar and wing-centric casual-dining restaurants, led by Buffalo Wild Wings, Miller’s Ale House and Twin Peaks.

“The rebound of some key industry players, coupled with the continued fast-casual boom (resulted) in a strong year for Technomic’s Top 500,” Mr. Tristano said.