Smaller fast-food chains that make “better” burgers are growing faster than their larger rivals, according to a new report — though in some cases, the chains are still very small. Shake Shack grew by 133% in 2010, and now has seven stores. Smashburger had the second highest growth rate, at 116%. and now has 93 branches.
While McDonald’s Burger King and Wendy’s account for 75% of the fast-food burger business, the smaller chains are setting themselves apart, with more limited, focused menus. Nation’s Restaurant News chewed on the data from research firm Technomic:
“This is an interesting time in the burger segment,” said Technomic executive vice president Darren Tristano. “We are seeing very high growth rates from smaller brands, and a steady stream of new better-burger entries making their presence felt, while, at the same time, some of the larger brands are struggling to maintain their footholds.” …
Limited menus have actually benefited fast-casual brands, Tristano said, while much of their sales growth is due to the break-neck pace at which they are expanding their unit counts.
Shake Shack and Smashburger ranked first and second, respectively, in terms of unit count expansion, with Shack Shack growing 133 percent to seven units in 2010, and Smashburger growing 116 percent to 93 locations. Mooyah Burgers & Fries was third, followed by Five Guys Burgers and Fries, Freddy’s Frozen Custard & Steakburgers, and The Habit Burger Grill.
The smaller chains are also finding other ways to bring in new customers. According to Nation’s Restaurant News, they’re “competing well against casual-dining chains by serving alcoholic beverages at lower price points.”
‘Better-burger’ brands top burger segment growth [Nation's Restaurant News]