Independent Burgers’ Growth Falters

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Independent Burgers’ Growth Falters

The number of limited-service burger restaurants declined in the past year, following several years of dramatic unit growth that contrasted with slow growth for burger chain restaurants.

The NPD Group’s Spring 2015 census of restaurants open as of March 31, 2015, shows a 1% drop in the overall number of restaurants (all types), driven by a 3% falloff in the number of independent restaurants (all types). The number of chain restaurants increased to 288,585, which still trails the 340,135 total for all independent restaurants.

Overall the QSR burger category remained flat. But the number of independents open as of March 31 dipped by 1.8% (less than the overall decline in independents) to 6,092. Burger chain locations increased less than 1% to 45,555.

NPD Burger Unit Counts

Source: The NPD Group

Even such a relatively small decline for independent burger restaurants as 1.8% for the past year is startling given that the independent segment was up 6% last spring and up 7.2% year-over-year in 2013. The number of burger chain locations has not risen by more than 1% in any year for the last five at least.

Earlier this month NPD announced that customer traffic at QSR burger chain restaurants has declined by 3% over the past five years. However, customer counts at independent burger restaurants were actually up 1% for the year ended May 2015 and are up 3.5% since the 12 months ended in May 2011. That data makes the decline in independent burger restaurants even more surprising.

NPD says the decrease in independent restaurants overall was concentrated in the full-service segment (casual dining, midscale/family dining, and fine dining).  Full-service independent units were down 3% while QSR independent units remained stable. However, the number of fast-casual restaurants (of all menu types) was 7% higher than a year ago.

NPD called the overall restaurant decline “a reflection of the stalled traffic growth experienced by the foodservice industry over the past several years.  Independent traffic, quick service hamburger, and full service restaurant visit declines, particularly at midscale/family dining restaurants, are contributing to industry traffic not growing.”

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