Report: Micro Restaurant Chains Grow in Major Cities
The next step for a successful single- to two- unit restaurant, an independent restaurant, is to grow into a micro-chain of three to 19 units. Although total independent restaurant unit counts have declined by 4 percent from a year ago, micro-chain units are increasing in major U.S. cities, reports The NPD Group, a leading global information company. Micro-chains, which are often locally based, represent a diverse segment of restaurants that typically reflect emerging trends in food, a positive customer experience, and hit the right buttons for restaurant customers today.
Evidence that micro-chains are resonating with today’s consumers is the growth in these chains’ unit counts in major cities. Dallas-Fort Worth realized the strongest gain in micro-chain units, up 5 percent from a year ago, according NPD’s biannual restaurant census. Micro-chain units also increased in Atlanta (+3), Chicago (+1), Houston (+2), Los Angeles (+2), Orlando (+4), San Francisco (+2), and Washington, DC (+3). Micro-chain unit counts were flat in New York City and Philadelphia and declined by 2 percent in Boston.
Micro-chains also fared best among restaurant chain systems (i.e. small and major chains) in terms of orders placed and spend with U.S. broadline foodservice distributors. The 3 to 19 unit chains increased their total spend for foods and goods with broadline distributors by 5 percent and cases ordered by 3 percent in the first quarter of the year compared to year ago, reports NPD’s SupplyTrack, which tracks monthly sales of every product shipped from leading broadline distributors to each of their foodservice operators. Micro-chain spend and cases ordered from broadline foodservice distributors also increased in many of the major markets where there was also unit growth. In comparison, the total dollar spend for all restaurant and retail foodservice operators with major broadline foodservice distributors was 2 percent and cases ordered were up 1 percent.
“Micro-chains are bringing to the restaurant scene a new attitude and perspective,” says Annie Roberts, vice president of NPD’s SupplyTrack. “Many are successful because they have their finger on the pulse of today’s restaurant consumer. They are often locally based and offer their customers a creative concept, great food, and an enjoyable experience. What’s not to like.”