TOO MANY BURGER CHAINS
grew 9% apiece. “Other,” a catch-all category that includes Mediterranean and bowl chains, grew 7%. While many of these sectors are smaller, their performance still represents a shift away from more traditional fast-food menu items toward other, newer items. So in some respects, consumers just opted for something other than a burger a few more times than usual last year. MENU PRICES Another big issue is prices. While McDonald’s and the fast-food burger sector was hit with a lot of consumer frustration over prices, Five Guys in particular was hit hard by anger on social media over high menu prices. As the largest fast-casual burger chain,
Five Guys has an outsized impact on the sec- tor’s overall performance, much like McDon- ald’s weakness is helping bring down the en- tire fast-food sector. If Five Guys had, say, a Culver’s-like 2024 and grew sales 15% rather than being slightly down, the fast-casual burg- er sector would have grown 8% last year and we would not be writing this piece. It’s also likely that this frustration spread to other chains in the sector. Many brands might have been able to offset this with unit growth. Regardless, consumers were frustrated by high prices. They have a lot of burger choices. And they were shifting more toward chicken and Mexican and other items. All that hurt the fast-casual burger sector.
Burgers are the most popular center-of-plate entrée in the restaurant industry. The fast- casual burger sector itself is relatively small, with $7.2 billion in total sales last year, or less than half the sales of fast-casual chicken or fast-casual Mexican. But the fast-food burger sector generat- ed $105 billion in system sales and includes three of the 10 largest restaurant chains in the U.S., including the biggest. Of course, that sector also didn’t do great—just 1.3% total sales growth—but the simple fact is, consum- ers have plenty of burger choices. Three of the fastest-growing fast-food burger chains, Whataburger, Culver’s and In- N-Out, could all easily be labeled fast-casual and nobody would blink. If we add those three chains to the fast-casual list, then total sales increased 8% and I wouldn’t be writing this. (Side note: This is probably as big an argu- ment to do away with the “fast-casual” sector and just call it all fast food.) Consumers do like themselves a good burger. They just have a lot of choices. SHIFTING CONSUMER DEMANDS Diners grew choosy last year. And at least part of that choosiness had to do with the items being served at the restaurants. Total limited-service burger chain sales grew just 1.4% last year. But that kind of weakness was evident elsewhere. Pizza sales grew just 0.6%. Total sandwich sales actually declined 0.44%. Mexican and chicken, on the other hand,
MOST OF THE GROWTH IN THE FAST-CASUAL BURGER SECTOR CAME FROM SMALLER EMERGING REGIONAL CHAINS.
PHOTO: ENVATO
JULY 2025 RESTAURANT BUSINESS
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