Americans are rejecting the consistency of national restaurant chains after decades of dominance in favor of the authenticity of locally owned eateries.
Darren Tristano, chief insights officer at Chicago-based restaurant research firm Technomic, tells Bloomberg the shift represents a turning point in the history of American restaurants.
“This really seems to be the dawning of the era of the independent,” Tristano says. “The independents and small chains are now outperforming. The big chains are now lagging.”
Free-marketing websites like Yelp have boosted the fortunes of independents in the age of McDonald’s, Domino’s, Taco Bell and Olive Garden.
Annual revenue for independents will grow about 5% through 2020, while the growth for chains will be about 3%, according to Pentallect Inc., a Chicago-based industry researcher. Sales at the top 500 U.S. chains rose 3.6% last year. The gains were larger, 3.9%, for the whole industry, Technomic data show.
It’s not that Wendy’s Baconator or the Grand Slam Slugger Breakfast from Denny’s will soon go the way of the dodo. But some national chains are feeling the pain amid dismal sales. Subway Restaurants, the biggest U.S. food chain by number of locations, saw the number of domestic outlets decline for the first time ever last year.
Noodles & Co. and Red Robin Gourmet Burgers Inc. are shutting locations after failing to attract customers. Applebee’s, owned by DineEquity Inc., reported same-store sales tumbled almost 8% in its latest quarter, and casual-dining chain Ruby Tuesday Inc. said in March it may sell itself after a prolonged slump.
