FINANCE
THE FAST- CASUAL BURGER BUSINESS LOST STEAM LAST YEAR The Bottom Line: Sales at fast-casual burger chains were weak in 2024, particularly when compared with fast-casual chicken or Mexican brands. Have consumers moved on?
FIVE GUYS’ STRUGGLES LAST YEAR LIKELY KEPT DOWN THE FAST-CASUAL BURGER SECTOR. | PHOTO: SHUTTERSTOCK.
F ifteen years ago, the restaurant world could not get enough of higher-end burgers. Investors poured money into fast- casual burger chains. Franchisees signed up as quickly as they could to open Smashburger restaurants or Five Guys locations. By late 2014 and early 2015, two of these companies, Habit Burger and Shake Shack, went public, with both IPOs outdoing the famous 2006 in- itial public offering of Chipotle Mexican Grill. They appeared to hit a wall, at least last year. Total sales by fast-casual burger chains grew 2.76% last year, lower than the 3% sales growth for the entire Technomic Top 1,500. And yet that probably doesn’t quite tell the full story. By comparison, total fast-casual sales grew 8.4%. Restaurant chains that get the fast-casual label generally performed far bet- ter. Fast-casual Mexican sales grew 11%. Fast-
casual “other” sales grew 8.5%. Fast-casual chicken sales grew 24%, a number so ridicu- lous we keep rechecking it. Most of the growth in the fast-casual burg- er sector came from smaller emerging and regional chains. Among fast-casual burger chains that generated more than $50 million in system sales last year, median sales growth was just 0.58%. To be sure, plenty of chains did perfectly fine, and based on the growth of some emerg - ing chains there appears to be at least some appetite for the product. Yet for every Shake Shack (sales growth 15%) there was a Burger- Fi, which filed for bankruptcy, closed a bunch of stores and watched sales fall 30%. Several of the biggest fast-casual chains lost ground last year, including Five Guys (sales down 0.7%), Farmer Boys (down 5.9%) and Smashburger (down 4.6%). Here’s a look as to why.
JONATHAN MAZE
JONATHAN.MAZE@INFORMA.COM
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RESTAURANT BUSINESS JULY 2025
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