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CHD Expert Evaluates and Compares the Independent and Chain Restaurant Segments, Breaking Each Down with an Overview Around Full Service and Limited Service Restaurants.
Independent restaurants have a large presence in the American restaurant landscape, making up 66 percent of the total US market.
(Chicago, IL – March 3, 2015) – CHD Expert, the Chicago-based foodservice database and analytics firm, has released the latest market landscape overview, detailing Independent restaurants in the United States. According to data pulled from CHD Expert’s current database, Independent restaurants make up 66 percent of the total US restaurant landscape. All data in this release is per CHD Expert’s database as of February 2015.
In the US, while some menu types are dominated by chains, the total overall number of Independent restaurants outnumbers chain restaurants by nearly two to one. CHD Expert defines an Independent restaurant as one having less than 10 units in operation nationwide. There are more than 443,000 Independent restaurants in operation in the US today, compared to more than 229,000 chain restaurants.
Breaking down the restaurant landscape into Full Service Restaurants (FSRs) and Limited Service Restaurants (LSRs), CHD Expert’s data reveals that the overwhelming majority of FSRs are Independent, at 90 percent. Comparatively, only 41 percent of LSRs are classified as independent. Chain restaurants tend to fall more within the LSR category, where customers typically order and pay at a counter before receiving food. Table service is provided at FSRs; where the bill is paid after the customer has eaten.
Specifically looking at chain restaurants in the US, the top three largest LSR chains include Subway with over 26,000 units, McDonald’s at over 14,000 units, and Starbucks with over 11,000 units. In total, the top ten LSR chains combine to more than 94,000 units, whereas the top ten FSR chains make up just over 12,000 units. The top three FSR chains include Applebee’s with over 1,800 units, Waffle House at 1,700 units, and Denny’s with over 1,500 units. See Figure 1 for a breakdown of Independent FSR and LSR segments.
Figure 1: Breakdown of Independent FSR and LSR Segments by Percent of Independent Market Share
Drilling down to the state level, states with the highest percentage of independent FSRs as a percentage of the state’s total restaurants are: Vermont (97 percent), New York (96 percent), Washington DC (96 percent), Maine (95 percent), and Rhode Island (95 percent). In terms of LSRs, this segment type has also proven popular in the North East; with the states with the highest percentage of LSRs as a percentage of the total Independent landscape being: New York (62 percent), Vermont (61 percent), New Jersey (59 percent), Pennsylvania (53 percent), and Massachusetts (53 percent).
When considering the longevity of each restaurant segment, 60 percent of Independent restaurants and 78 percent of Chains restaurants have been in business for 5+ years. However breaking this down into FSR and LSR, the landscapes between the two segments look quite different.
Over 79 percent of Full Service Restaurant Chains and 78 percent of Limited Service restaurants have been open more than 5 years, whereas for Full Service Independent Restaurants the percentage drops to 62 percent and only 57 percent of LSR Independents have reached the “5-year mark.”
When looking at Simplified Menu types there are other interesting statistics about the independent restaurant landscape. Other Ethnic Food, Chinese and European restaurants are all over 95 percent Independent, with very few FSR chains in these menu types.
To the contrary, menu types like Hamburgers, Chicken, and Frozen Deserts are much more common chain restaurants. Chain units dominate these menu types, where chains represent 86, 73 and 68 percent of these menu types in the US respectively.
To access the infographic that complements this press release, please click here.
“Many foodservice manufacturers and distributors mistakenly believe that they need to rely on big chain restaurants generate larger revenues from the sale of their equipment and products. With their buying power and contracts with manufacturers, chains have the ability to require highly discounted product and low margins to the manufacturer and distributor. Finding a way to reach independents with a cost-effective marketing strategy will be the key to the future of the foodservice distributors and manufacturers,” said Brad Bloom, VP of Sales and Marketing at CHD Expert The Americas. “The Independent landscape is full of opportunities when equipped with relevant data on this foodservice segment. Manufacturers, distributors, brokers and sales agents can contact the right operators and more effectively market to them. CHD Expert is proud to be the industry leader in collecting data on this unique segment and sharing it with our clients.”
About CHD Expert
CHD Expert is the worldwide leader in collecting, managing and analyzing data for the Away-from-Home Global Foodservice Market. For more than 10 years CHD Expert has been dedicated to support Foodservice channel members in providing a global vision and an in-depth understanding of the industry (in Europe, North America, and Asia Pacific). Our objective is to support food service providers in their sales and marketing strategies by providing the most comprehensive and accurate foodservice census, housing operator intelligence for more than 4 million operators worldwide. For additional information, please visit chdexpert.staging.wpengine.com or call 1-888-CHD-0154.