R&I Top 400 Chain Restaurants: Get the Picture?

The Top 400 is not just a chain-restaurant story but a snapshot of the whole industry and how consumers shape it.

By Patricia B. Dailey, Editor-in-Chief -- Restaurants & Institutions, 7/1/2007

Some facts to help put this special themed issue of R&I in perspective: Americans get their clothes dirty and wrinkled and then correct the sartorial mishaps by spending more than $8 billion annually to have the duds dry-cleaned. We fret and frown over cellulite and learn how naso-labial folds can be erased with injectables, these deep bows to vanity last year creating a $2.8-billion U.S. plastic surgery market.

At the same time, we like to smell pretty and, to that end, spent roughly the same on prestige perfumes as on cosmetic surgery. Women, ever enchanted with extravagant pouches, purses and sacks to sling over wrists or shoulders, spent $6.9 billion on handbags in 2006, buying, on average, four new ones in that time frame.

Increasingly comfortable with the electronic universe, last year saw a hefty $110 billion or so doled out for online purchases—a figure that represents roughly one-fifth of total U.S. retail spending.

When not shopping via the Web, we perhaps instead are playing video games, a trend that has led to sales of $7.4 billion for those tools of interactive pursuit. Increasingly we’re drawn to natural foods and products, hoping perhaps that in them lies the key to better health and longer life. Last year, sales of such products rose to $56.76 billion. And whether their output is destined for juicy burgers, butter-soft shoes or milk for a pungently sharp cheese, livestock cattle are vastly important, making them a $71 billion U.S. industry.

All of those sectors, etched into the larger, more complicated picture of American consumer lifestyles, stand with vibrancy and strength as they chip in their shares to the total U.S. economy. Whether measured by dollars and cents or by level of consumer interest, need and engagement, each is, in its own way, a powerhouse. Yet placed alongside the U.S. foodservice industry, they all pale in size, reach and scope, a point brought into sharp, clear focus by R&I’s 43rd annual ranking of the Top 400 chains.

As just one part—although clearly the largest—of the $535-billion foodservice industry, these 400 brands combined tally out to more than $277 billion in global sales, a number that easily surpasses the gross domestic product for many countries—Vietnam, Libya, Oman and Morocco among them—much less that of many domestic manufacturing and service sectors.

Immersed in day-to-day dealings of the chain restaurant world, the industry’s sheer magnitude—and all that it stands for—easily is overlooked and underestimated. While there are nearly as many ways to dissect, parse and explain it as there are dollars spent, the essence of the industry can be very succinctly summarized: Each day, millions of consumers patronize these restaurants, their hungers and desires contributing to the companies’ growth and financial gain and, more importantly, leading the industry’s directional path.

As much as this issue devotedly focuses on the Top 400 chains, it is a snapshot of the entire industry, applicable to all operators in all segments. Within the stories, charts, graphs, grids and numbers are clues about how consumers connect with restaurants and the industry. And there really is no information that is more important or more valuable.