Industry publication Nation’s Restaurant News releases an annual report on the state of America’s restaurant chains every summer, and to us food media types, sifting through the new crop of data feels like being a kid in a candy store (particularly for those food media types very focused on candy stores already). But this year’s Top 500 report, based on 2020 sales figures, is a bit different. It feels a little more like reading an anthropological research paper, since it reflects consumer behavior in the midst of an unprecedented global pandemic. How did people’s spending habits change in uncertain times? Who was hitting up the drive-thru, and when? What foods were people turning to for comfort? Looking at NRN’s top 50 restaurants in America, here are some interesting takeaways we found.
McDonald’s remains untouchable in the American chain restaurant landscape. Its systemwide sales in 2020 were more than twice that of its closest competitor, Starbucks, and it saw modest but unmistakable growth of 0.4% over the previous year. All this even after axing all-day breakfast and losing commuter business during quarantine. It’s getting harder and harder to imagine what it might take to knock McDonald’s off the pedestal someday.
Starbucks is holding strong in the number-two spot, and this year, that is quite an accomplishment in itself. The chain has such a strong association with metropolitan commuters that the pandemic could have spelled doom for the brand, and to be sure, Starbucks did suffer as a result of office closures—overall sales were down 5% as compared to 2019. But it was still comfortably ahead of Taco Bell in the third spot, and I have some guesses as to why that might be: the higher cost per menu item at Starbucks can lead to high sales figures, as can the sheer number of Starbucks locations, second only to Subway at 15,337 units (and well ahead of McDonald’s 13,673).
Ah, Subway, will your troubles ever cease? While the chain was still number one in terms of the amount of locations this year (22,177), it fell even farther in the rankings, slipping down one spot and reporting a net loss of 8.2% (!!!) over the previous year. The pandemic was hard on these chains in different ways, but given Subway’s recent track record, it’s not unreasonable to think that it might have experienced those kind of losses whether there was a pandemic or not.
At a media event earlier this year, Wendy’s reflected on a year of serving its brand-new breakfast menu, which it debuted just a week prior to nationwide shutdown orders last year. That breakfast menu ended up seriously bolstering the chain throughout 2020, in part because the work-from-home crowd was placing breakfast orders for the whole family, not just for the solitary on-the-go commuter. The sales figures alone cannot fully illustrate just how well Wendy’s did last year. For that, you need to look at the big picture: it snuck up two slots in the rankings from number 7 to number 5, with a year-over-year change of +4.8%. Take that, McDonald’s.
Popeyes might beat Chick-fil-A in a chicken sandwich taste test, but the former did less than half the business of the latter last year. Not only that, but Chick-fil-A sales grew by 3.8% in 2020 over the previous year, and it sits well above chains that have significantly more locations. Just in case we thought we might be on the downswing of chicken sandwich mania, it’s worth noting that Chick-fil-A has steadily continued to exhibit chickeny dominance.
There have already been a zillion articles published over the past 16 months detailing the peril that chain restaurants find themselves in, but NRN’s Top 500 report cites some interesting figures that illustrate the industry-wide upheaval:
Sales among the Top 500 in the U.S. totaled $305.1 billion, a decline of 4.3% compared with 2019. That translates to the disappearance of $13.8 billion in sales among the Top 500 cohort after restaurants were forced to close for dine-in service.
“The disappearance of $13.8 billion.” That’s a striking way to say that, isn’t it? There’s a reason that restaurant dining quickly became shorthand for all the struggles of quarantine: we all do it, we all love it, many of us make a living off of it, and none of us had never encountered a scenario where we were completely stripped of our ability to do it. If not for workarounds like mobile app orders, curbside pickup, and delivery, it’s likely that the $13.8 billion figure would have grown much larger. Let’s hope the industry not only recovers, but emerges even stronger, equipped to pay its workers good wages and serve up chicken sandwiches until we finally, finally begin to tire of them.
Coming in dead last on the top 50 restaurants was TGI Fridays, down 18.2% since 2019. Ouch. And which restaurant, you might wonder, was heartbreakingly ranked number 51, so close and yet so far from inclusion in the Top 50 list? That title goes to Checkers/Rally’s. We’ll be rooting for them in 2022. Come on, Checkers and/or Rally’s! You can do it! We wish you the very best as you attempt to break away from your spot in the rankings directly ahead of Hooters.