GE Capital, Franchise Finance just released its 24th annual Chain Restaurant Industry Review, showing an increase in customer spending but a decline in foot traffic throughout the past year.
Year over year, while same store-sales decreased 0.1 percent, the average amount of each visitor's check increased 2.6 percent.
Nominal restaurant sales rose 3.1 percent to $440.2 billion in 2013. This trend is expected to continue, with an increase of 3.6 percent anticipated in 2014, according to the report.
"Overall restaurant trends are improving, but we know the competitive environment is heating up and the U.S. economic situation is still challenging for some pockets of the population," Kimberly Savilonis, senior vice president of strategic marketing, said in a news release. "However, we recognize that there are strong operators who work hard every day to grow their businesses, and we're pleased to continue building long-standing relationships with the middle market."
Top 100 U.S. chains
Also, the Chain Restaurant Industry Review includes GE Capital's analysis of the top 100 chains in the U.S. At $218 billion, their system-wide sales represent 49.5 percent of all restaurant sales. In general, chain restaurants accounted for 44.5 percent of total U.S. restaurants — or 633,043 units — in 2013.
Sales among those on the list grew 3.5 percent year-over-year, outperforming the overall restaurant industry. Limited-service restaurants grew faster than full-service restaurants, continuing the trend seen over the past six years.
Two brands made their debut on the top 100 list this year, according to the release: Jersey Mike's and Taco John's.
To generate the Chain Restaurant Industry Review, GE Capital evaluated the industry using more than 25,000 individual unit-level financial statements as well as its SmartChart tool.
According to this data, the top quartile of GE Capital, Franchise Finance's QSR customers has an EBITDAR margin of 17.5 percent of sales, while the bottom quartile has an EBITDAR margin of 12.6 percent of sales. If operators in the bottom quartile reached average performance, they would profit, on average, an additional $22,000 per store (assuming $1 million of sales per store). If the same operators in the bottom quartile reached top performance, they would profit, on average, an additional $49,000 per store (again assuming $1 million of sales per store).
The SmartChart tool also shows that the chicken segment continues to have the highest cost of goods sold, comparatively, although both COGS and labor costs are down for the overall chicken segment.
Meanwhile, the FSR segment has seen steadily increasing COGS for four years, and labor costs are higher than they have been in four years, the release said.