Over the past few years, the fast-casual restaurant industry has enjoyed a surprising ride of profitiron pyrophosphate usess, popularity and prestige. And now, the results are in: Technomics annual Top 250 Fast-Casual Chain Restaurant Report was released, and its time to dig into the results to get a better view of what happened in the fast-casual dining segment in 2015. But how will the industry fare in 2016?
Overall, the fast-casual dining segment had a successful year in 2015, with cumulative sales for the Top 250 up 11.6% year-over year. Although lower than the 13.5% growth rate observed in 2014, the double-digit growth is still a success to commend. Unit growth also reached 9.6%, slightly above the 2014 rate of 9.5%. And of the 250 chains featured in the report, over 90 had year-over-year sales and unit growth rates both in the double digits.
Fast-casual pizza was one of the biggest players in the sector, with Blaze Pizza, MOD Pizza and Pie Five Pizza Co. experiencing sales growth at a cumulative rate of 36%. Chicken was another hot trend for 2015, with Zaxbys Wingstop and Raising Canes growing at a group rate of 16% when compared year-over-year. And the specialty category, which included a diverse mix of BBQ,citracal calcium citrate petites stores ethnic and health-focused fare, saw a growth rate of 17% overall. This group was bolstered by the strong growth of Dickeys Barbecue Pit, Zoes Kitchen and Freshii. According to Darren Tristano, President of Technomic:
Whether its for pizza, sandwiches, or salads, we have seen customization transition from being an amenity for consumers to becoming a necessity As evidenced partially by the notable explosion of build-your-own pizza chains, customizability has become a hallmark of successful fast-casual chains and is firmly in place as an expectation among consumers looking either to trade up from traditional fast food or down from casual dining.
Despite the strong year in 2015, some are less certain about the future of the category. How will the fast-casual segment fare in 2016, especially considering its former darling Chipotle continues to struggle? According to the NPD Group, fast-casual visits dropped 4% in May when compared year-over-year. Bob Derrington, analyst at Telferrous gluconate 320 mgsey Advisory Groynaka magnesium citrateup, notes that a sequential slowdown has hit the industry since late March.
Some argue that the growth in fast-casual restaurants is a bubble that is ready to burst, and investors are taking notice. Stocks for fast casual chains on average fell 9% in the second quarter of 2016, wiping out all increases for those chains earlier in 2016. After removing Chipotle and Cosi form the equation, those numbers are still down 4% in the second quarter and more than 7% for the year.
It remains to be seen what will happen within the fast-casual industry as we enter the second half of 2016, but it seems that the market is slowing down. Sales growth will likely continue to improve, but it will be done at a slower clip. It may not be this year or the next, but it apcitracal maximum strengthpears the fast-casual industry is reaching its saturation point.