Midwesterners love Chick-Fil-A. Drive up to one of these restaurants during lunch hour and you’ll see — cars will be flowing from the drive-through lanes into the street.
The good news for chicken lovers? Chick-fil-A hasn’t been shy about opening new locations throughout the Midwest.
This June, Chick-fil-A will open two new locations in the Louisville area. Representatives for the chain in March also appeared before a village board committee in Mount Pleasant, Wis., with plans for a new restaurant in that Milwaukee-area suburb. Chick-fil-A opened a location in Madison, Wis., late last year.
And when Chick-fil-A opened in Brookfield, Wis., in the fall of 2014, the location set a three-day sales record for the franchise, topping a previous three-day record held for about three years by a Chick-fil-A in Aurora, Ill. (How big those sales actually were, though, is unknown. Chick-fil-A doesn’t release daily sales figures.)
The chicken restaurant is certainly on a hot streak. According to the company, Chick-fil-A will open its first restaurant in New York City this summer. Already, the franchise has 1,850 locations across the United States, and has passed KFC to become the top chicken-based fast-food chain in the country.
Chick-fil-A restaurants generate more than $5 billion in annual sales.
Here’s the interesting part, though: Many of Chick-fil-A’s fast-food competitors are struggling. McDonald’s is fighting through a well-publicized slump. Sales at McDonald’s restaurants open for at least 13 months fell 0.2 percent in 2013. For Burger King, the news was even worse: Sales at restaurants open for 13 months or more fell 0.9 percent in 2013 here.
The National Restaurant Association says that sales in the quick service/fast-casual restaurant segment are expected to grow by 4.3 percent in 2015 and reach $201 billion.
Those might sound like impressive numbers, but they actually represent modest growth rates when compared to the historic performance of this sector.
The reasons why fast-food chains like Burger King and McDonald’s are no longer growing at previous rates are many: Consumers are more health-conscious today. Many are choosing fast-casual restaurants such as Chipotle or Five Guys Burgers & Fries. Established fast-food chains such as McDonald’s might have already expanded too much. How many of the same restaurants, after all, do communities need?
But Chick-fil-A — and competitors such as Chipotle and Subway — are showing that some fast-food chains are growing quickly despite the sluggish performance of fast-food restaurants in general. Chick-fil-A, after all, plans to open about 90 new locations in 2015. Subway, according to research from Marcus & Millichap, plans to open 2,500 new stores this year. That’s more stores than any other retailer is expected to open this year.
Five Guys will open 600 new stores this year, according to Marcus & Millichap, while KFC will open 350 in 2015.
The lesson here? U.S. consumers aren’t tired of all fast-food. They’re just looking for alternatives to the most venerable of chains.