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Report: Wendy’s passes Burger King

CHICAGO – The king has been dethroned.

Burger King, once the “prince” of the burger chain world, behind the real “king,” McDonald’s, has been passed by Wendy’s in U.S. 2011 sales volume, according to research firm Technomic Inc., to become the number 2 hamburger chain in America.

McDonald’s, the largest U.S. restaurant chain, boosted sales 5.5 percent in 2011, with total annual sales of $34.2 billion. Subway continues as the second largest restaurant chain in the U.S., followed by Starbucks, Wendy’s and Burger King.

U.S. systemwide sales for the Top 500 chains grew to an estimated $242 billion in 2011, up more than $8 billion over 2010.

As a whole, limited-service restaurants saw a sales bump of 3.7 percent. Bakery café chains, which grew 7.1 percent, represented another limited-service subsegment with above-average sales growth. Within this group, Panera grew 10.1 percent with 2011 sales of $3.3 billion. Other fast casual chains also contributed to stronger 2011 performance. A standout in the fast casual burger segment was Five Guys Burgers and Fries with sales growth of 32.8 percent.

Full-service restaurants experienced a 2.8 percent sales increase in 2011, following a flat year. The full-service seafood and steak categories showed healthy growth, with increases of 5.2 and 5.1 percent, respectively. Red Lobster, the category leader among seafood restaurants, outperformed the average, with a 6.2 percent sales increase. Among steak chains, LongHorn Steakhouse and Texas Roadhouse drove sales with increases of 13.1 and 9.2 percent, respectively.

The Ten Fastest-Growing Chains with Sales Over $200 Million

Ranked by Percentage Increase in Sales in 2011 vs. 2010

Rank Chain U.S. Sales ($MM) % Sales Change % Unit Change
1 Five Guys Burgers and Fries $951 32.8% 24.7%
2 Chipotle Mexican Grill 2,261 23.4 13.0
3 Jimmy John’s Gourmet Sandwich Shop* 895 21.8 17.1
4 Yard House 262 21.5 20.7
5 Firehouse Subs 285 21.1 19.0
6 BJ’s Restaurant & Brewhouse 621 20.9 12.7
7 Buffalo Wild Wings Grill & Bar 2,045 20.1 11.6
8 Raising Cane’s Chicken Fingers 206 18.2 24.0
9 Noodles & Company 300 14.9 11.4
10 Wingstop 382 14.7 3.4
Total $8,207 22.1 15.1%

*Technomic estimate

In total, the top 10 fastest-growing chains’ sales accounted for $8.2 billion, a 22 percent increase over 2010. Unit counts grew 15 percent.

More than 60 percent of the Top 500 restaurant chains posted at least nominal sales increases; only 193 of these chains suffered sales declines in 2011 compared to 231 in 2010. Both winners and losers appeared in every segment and menu category. These widely-mixed results demonstrate the overall competitiveness of the industry and the need for suppliers and operators to carefully identify and focus on the winners.

International performance by the Top 500 restaurant chains continued to outperform their domestic counterparts in 2011. International sales (up 6.4 percent) outpaced U.S. sales (up 3.4 percent); international unit growth was also up 6.5 percent versus 0.7 percent for U.S. units.

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