2024 Unit & Sales Growth

Jun 18, 2024 | Insights, Restaurant Research

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Executive Summary

  • Systemwide sales for the $1B+ Chains increased +7.5% in 2023 (+28% since 2019) compared to +10.6% (+43.2% since 2019) for the total restaurant industry.
  • 2023 total restaurant industry market share for the $1B+ Chains continued to decline (-0.9% y/y to 33.0%), representing the lowest level in at least 21 years as smaller chains and independent restaurants gain market share post-covid.
  • The annual gross unit development growth rate for the $1B+ Chains increased +2.8% over the last 2 years and continues to be pressured by: persistent construction cost inflation (RR’s New Build Cost Index increased +6.3% in 2023 and is up +33% since 2019); and less favorable borrowing terms (tighter credit requirements & higher rates).
  • The 2023 total unit count for the $1B+ Chains finally exceeded the 2019 level, with smaller chains and independent restaurants outperforming. Net unit growth for the $1B+ chains has not exceeded +1% since 2016.
  • 2024 gross unit development growth is projected to remain unchanged at +2.8%.
  • The 2023 closure rate for the $1B+ chains held steady at 2.0%, slightly below the 2.3% 10-year average. Closure rates have held-up despite persistent unit level margin pressure since 2014 (while the average store-level EBITDAR margin improved to 17.7% in 2023 from a 21-year low of 16.8% during 2022, it remains substantially below the 19.1% historical average).

Restaurant Systemwide Sales Growth Graph

New Unit Development Summary Graph

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