King Of The Chicken: Chick-fil-A Dominates KFC
By Kara Murphy, contributing writer, Integrated Solutions For Retailers
New report details decline of sales in nation’s 500 largest chains
Chick-fil-A is America’s king of chicken. The Atlanta-based chain surpassed KFC in sales in 2013, with a 9.3 percent growth in sales.
A report from Technomic said Chick-fil-A reported $5.1 billion in sales, as compared to KFC’s $4.22 billion. Remarkably, Chick-fil-A topped KFC despite having far fewer stores than its competition. By the latest count, Chick-fil-A has 1,175 stores, while KFC has 4,491. In addition, Chick-fil-A is closed on Sundays.
So what is the chicken chain doing right? Bloomberg Businessweek laid out the reasons for Chick-fil-A’s success in a recent story:
- Traffic. Each Chick-fil-A restaurant made an average of $3.2 million in 2013, more than three times as much as the average KFC, which made an average of $938,000 per store.
- Breakfast. The company has a sizeable breakfast business
- Bigger checks and a different menu. Customers at Chick-fil-A spend a little bit more on average than they do at competitor businesses, but the company gets away with it because its menu is so different.
So what’s in the future for the new king of chicken? The majority of the company’s stores are in the south — there’s just one in New York state for example — and the company is focusing its growth plans in the northern, midwest, and western states. Chick-fil-A expects to open 100 new stores in 2014.
Other highlights from the annual Technomic report, which details the health of the nation’s top 500 restaurant organizations:
- The 500 largest U.S. restaurant chains registered a 3.5 percent annual sales increase in 2013, a large decline from 4.9 percent recorded in 2012. "Although we have seen overall growth within the Top 500, the pace has slowed since last year," Ron Paul, the president of Technomic, said in a news release. "Competition for share of stomach is getting more and more challenging. But brands that have found a way to differentiate themselves are gaining market share."
- Among limited-service restaurants, the highest growth came from the Asian, bakery-café and coffee café categories. Leaders were Panda Express, with 10.7 percent sales growth; Panera Bread with 11.8 percent growth; and Starbucks with 10.6 percent growth.
- McDonald's, the largest U.S. restaurant chain, saw minimal sales growth of 0.7 percent in 2013, to reach annual sales of $35.9 billion.
- Subway ranks as the second largest restaurant chain in the U.S., followed by Starbucks, Wendy's, and Burger King.
- Full-service restaurants posted a 2.4 percent sales increase in 2013, a decrease over the 2.9 percent in 2012.
- The exception to the slow growth was full-service steak restaurants, which posted an average increase of 6.2 percent. LongHorn Steakhouse and Texas Roadhouse dominated the category, with a 12.8 percent and 11.1 percent sales growth, respectively.
- Among varied-menu chains, which increased sales by 2.5 percent overall, the category leader, Buffalo Wild Wings was the category leader in the varied-menu chain category, with a sales increase of 12.9 percent.
- The five fastest-growing chains with sales over $200 million ranked by percentage increase in sales in 2013 vs. 2012 were Dickey's Barbecue Pit, Smashburger, Raising Cane's Chicken Fingers, Marco's Pizza, and Jersey Mike's Subs.