Micro Restaurant Chains Grow in Major Cities As Independent Restaurants Expand
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 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.
Micro-chains are just the place to serve the NYE crowd! According to new AudienceSCAN research, 14.5% of Americans celebrated New Year’s Eve in a restaurant/bar/hotel in 2016/2017. Get them to do it again!
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.
New Year’s Eve celebrators will want to ring in the new year at a restaurant’s new location, so be sure to tell them about it through advertising. The new AudienceSCAN survey showed New Year’s Eve Celebrators learn about events through TV commercials (19.5%) and radio spots (16.8%).
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.
Expanding small restaurants have the opportunity to show off new locations and menus through special NYE events. Let diners know about it through internet banner ads. The new AudienceSCAN survey revealed 38% of New Year’s Eve Celebrators took action after seeing them in the past month.
“Micro-chains are bringing to the restaurant scene a new attitude and perspective,” said 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.”