Chick-fil-A is now the third-largest restaurant chain in America, and McDonald’s and Starbucks should be terrified

Chick-fil-A is now the third-largest restaurant chain in America, and McDonald’s and Starbucks should be terrified

Chick-fil-AChick-fil-A is thriving.Hollis Johnson/Business Insider

  • Chick-fil-A is now the third largest restaurant chain in America by system-wide sales, according to Nation’s Restaurant News data.
  • The chicken chain grew sales by 16.7% in 2018, reaching $10.46 billion. 
  • Chick-fil-A moved up from the No. 7 spot on last year’s Top 200 ranking, passing Wendy’s, Burger King, Taco Bell, and Subway.
  • Visit Business Insider’s homepage for more stories.

Chick-fil-A has whipped past rivals to become the third-largest restaurant chain in America.

The chicken chain’s massive growth in 2018 moved it into the No. 3 spot on the ranking of the largest restaurant chains in the US, with $10.46 billion in American systemwide sales, according to Nation’s Restaurant News analysis published on Monday.

McDonald’s maintained the No. 1 spot, with $38.52 billion in American system-wide sales. Starbucks held onto the No. 2 spot with $20.49 billion. 

Chick-fil-A moved up from the No. 7 spot on last year’s Nation’s Restaurant News’ Top 200, passing Wendy’s, Burger King, Taco Bell, and Subway. Chick-fil-A’s system-wise sales grew 16.7% in 2018, up from $8.97 billion. 

Experts say there is no reason to believe Chick-fil-A’s growth will slow down any time soon. If anything, Starbucks should be worried it could lose its silver medal. 

Read more: Why Chick-fil-A’s decision to close on Sundays is a brilliant business strategy

“Can they double that? I think that is a very reasonable goal for them,” Kalinowski Equity Research founder Mark Kalinowski told Business Insider in May.

“I would be suprised if they didn’t double that in the not too distant future,” Kalinowski continued. “Can they reach $30 billion? I think that’s also a realistic goal if you give them enough time. And, that should put them ahead of Starbucks.” 

Why rivals should be scared

Chick fil A 45Chick-fil-A.Hollis Johnson/Business Insider

Chick-fil-A competes with chains that have many more locations due to its enviable average unit volumes. On average, a Chick-fil-A location brought in $4.6 million in annual sales in 2018, up from $4.2 million in 2017 — more than any other fast-food chain. For comparison, the average McDonald’s location made $2.8 million in 2018. 

Looking forward, Chick-fil-A has plenty of room for growth as it continues to expand outside of the South. 

“They’re severely under-penetrated,” Kalinowski said.

“Once you start looking at all these other big metropolitan areas in all these states, there’s room for growth for — not just years and years to come, but potentially decades to come,” Kalinowski added. 

Kalinowski says that some of the brands that should be most concerned about Chick-fil-A’s growth are chicken rival KFC and Wendy’s, which is known for its chicken sandwich. In an increasingly competitive restaurant industry, many chains are feeling the pressure from Chick-fil-A’s growth, as rivals struggle to attract more customers. 

“I would say there’s pressure on the burger chains in general, and they’re fighting that off with varying degrees of success,” Kalinowski said. 

Published at Mon, 17 Jun 2019 20:40:35 +0000

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