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Bigger not always better, Technomic study says

Technomic released results regarding the 500 largest restaurant chains in the United States, which found that the restaurants accelerated their cumulative sales to a 4 percent increase growth in 2014, totaling an estimated $274.4 billion.

March 24, 2015

Technomic released results regarding the 500 largest restaurant chains in the United States, which found that the restaurants accelerated their cumulative sales to a 4 percent increase growth in 2014, totaling an estimated $274.4 billion.

However, Subway and McDonald's lost ground to "focused-menu competitors and emerging fast-casual chains," reporting overall sales decreases in 2014.

Technomic's data on the largest U.S. restaurant companies shows improved sales growth from a 3.4 percent increase in 2013, when they collectively reported $264.4 billion in sales. But the data also show four of the five largest brands in overall sales—McDonald's, Subway, Burger King and Wendy's—struggled in 2014, including estimated declines of 3.3 percent for Subway and 1.1 percent for McDonald's. The top five brands finished out at a 0.3 percent increase in annual sales.

"Brands focused on being the best, not the biggest, were the real winners in this year's Top 500," said Darren Tristano, executive vce president of Technomic, in a statement. "In many cases throughout fast casual and specialized segments within quick service and casual dining, narrowly focused menus and straightforward models for service and pricing have let brands put forward a value proposition and an image of high quality that definitely appeal to consumers. They are seizing market share, and big names like McDonald's and Subway will continue to lose share if their loss of focus continues to erode brand standards."