GE Capital: Growing Competition in U.S. Restaurant Industry
Established restaurant brands are fiercely competing with new concepts for market share while ingredient costs are rising, said GE Capital, Franchise Finance. Though diners are spending more during each visit, consumer traffic has declined over the past year.
Despite these challenges, the overall health of the restaurant industry remains strong, according to the 24th edition of the Chain Restaurant Industry Review, published by GE Capital.
Nominal restaurant sales rose 3.1% to $440.2 billion in 2013. Moreover, sales are expected to continue this upward trend, with an increase of 3.6% anticipated in 2014. Same store sales decreased 0.1 percent, but the average amount of each visitor’s check increased 2.6%.
“Overall restaurant trends are improving, but we know the competitive environment is heating up and the U.S. economic situation is still challenging for some pockets of the population,” said Kimberly Savilonis, SVP, strategic marketing. “However, we recognize that there are strong operators who work hard every day to grow their businesses, and we’re pleased to continue building long-standing relationships with the middle market.”
The Chain Restaurant Industry Review includes GE Capital’s analysis of the top 100 chains in the U.S. At $218 billion, their system-wide sales represent 49.5% of all restaurant sales. In general, chain restaurants accounted for 44.5% of total U.S. restaurants — or 633,043 units — in 2013.
Sales among those on the list grew 3.5% year-over-year, outperforming the overall restaurant industry. Quick service restaurants grew faster than full service restaurants, continuing the trend seen over the past six years.