Fast-casual chains drive Mexican food sales

by Bryan Salvage
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CHICAGO — During 2008, nine of the 10 fastest-growing Mexican limited-service restaurants were fast-casual chains, according to foodservice industry consultant Technomic. These types of restaurants primarily provide fresh, innovative food made to order in upscale environments. What’s more, their check averages somewhat higher than traditional quick-service, fast-food restaurants.

This and more are included in the company’s new study titled 2009 Technomic Top 50 Limited-Service Mexican Chains Restaurant Report.

Technomic relays within the Top 50 limited-service Mexican chains, sales for the fast-casual sub-segment increased by 11.8% to $3.7 billion and units increased by 6.6% to a total of 3,348. Sales for traditional quick-service chains increased 1.8% to $7.4 billion and units declined by -0.4% to 7,307 locations.

Consumer demand for this crossover sub-segment is driving its growth, said Darren Tristano, Technomic’s executive vice-president. "Consumers are trading down from more costly casual dining restaurants, finding they can get less-expensive, fresh, high-quality food choices within a comfortable setting at these limited-service establishments," he added.

Other highlights include:

  • The Top 50 limited-service Mexican chains’ sales increased by 5% to almost $11.2 billion in 2008, while units increased to 10,655, up 1.7%;
  • U.S. system-wide sales for the limited-service Mexican restaurant industry increased by 3.6% to more than $12 billion, while total units grew by 0.6%, down from a three-year high of 3% in 2007. Many operators shifted their focus away from expansion and towards creating stronger, more relevant brands;
  • Taco Bell, Chipotle Mexican Grill and Del Taco led the Top 50 in sales, with $6.2 billion, $1.3 billion and $560 million, respectively, and were also unit growth leaders;
  • Sales leaders for the fast-casual sub-segment’s sales were Chipotle Mexican Grill, Qdoba Mexican Grill ($447 million) and Moe’s Southwest Grill ($350 million), with growth rates of 20.7%, 17.8% and 15.9%, respectively; and
  • California-based quick-service chain Chronic Tacos was the fastest-growing chain in terms of percentage of sales and unit growth. The chain increased sales by 75% while doubling its unit count through its value-oriented, made-to-order, authentic Mexican offerings.
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