Unit & Sales Growth Report 2023

Jun 22, 2023 | Insights, Restaurant Research

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2022 Systemwide Sales & Market Share

  • Systemwide sales for the $1B+ Chains increased +7.6% in 2022 (+19% 3-year stacked basis) compared to +14.5% (+29.5% 3-year stacked basis) for the total restaurant industry.
  • 2022 total restaurant industry market share for the $1B+ Chains declined sharply (-2.2% to 33.9%), representing the lowest level in at least 20 years as smaller chains and independent restaurants recaptured lost market share post-covid.
Restaurant Systemwide Sales Growth Chart

2022/2023 UNIT DEVELOPMENT

  • While +2.8% 2022 gross unit development for the $1B+ Chains slightly outpaced 2021 and represents a continued improvement from the +2.1% 2020 low, it was pressured by unprecedented construction cost inflation (RR’s New Build Cost Index increased +14.2% in 2022) and longer project completion times.
  • Notably, the 2022 total unit count for $1B+ chains has yet to rebound to 2019 levels.
  • Gross unit development is projected to grow +2.8% in 2023, although actual results could also be pressured by a continuation of elevated building material costs (RR Index +10.0% YTD 5/23) and less favorable borrowing terms (tighter credit requirements & higher rates).
  • Although 2022 closure rates for the $1B+ Chains continued to improve from 2020’s elevated level, they have been generally trending higher since 2013, reflecting persistent unit level margin pressure (the average 2022 store-level EBITDAR margin fell to an all-time low of ~16.7% from ~19.1% in 2021).
  • Going forward development could benefit from improving store level profit prospects, reflecting higher menu prices taken over the last 2 years, easing commodity prices and ongoing efforts to cull weaker stores/operators.
New Unit Development Summary

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