QSR Magazine - The QSR 50 - August 2002 - 18

SEGMENTS | AMERICA’S HOTTEST CHAINS Breaking Down the Segments cent, its fourth straight strong increase, to displace Hardee’s at number five. The company is confident in its future, and it announced in May that it would authorize an increased common stock repurchase program, in which the company can buy back $30 million of its common stock. Chicken It’s a no-brainer that consumers want choice, Who’s performing best in burgers, chicken, seafood, pizza, and the chicken category would seem idesandwiches, and Mexican. ally situated to take advantage of this. After all, you can do almost anything with S THE LINES BETWEEN QUICK-SERVICE, positive growth. The chain continues to chicken, making the menu options somequick-casual, and casual dining struggle with consumer indifference, financial what staggering. become less defined, it becomes trouble in the franchisee community, and (as Given that, it’s interesting to note that harder to talk about the indus- of press-time) an aloof corporate parent, but four of the top five chicken chains are pritry in segments. Burger and seafood chains new CEO John Dasburg aims to turn it marily known for their fried product, serve chicken, sandwich chains serve pizza, around. BK’s star brand, the Whopper, cele- though they too offer an increasing variety chicken chains serve sandwiches—all in an brates its fortieth anniversary this year, but the of menu options. effort to keep up with the times. Even so, chain is focusing more attention on the slew KFC once again tops the chicken segthough, grouping by traditional segments is ment in terms of systemwide sales, still a valuable way to see how the top chains W H O ’ S T O P S B Y S E G M E N T with 2001 sales of $4.7 billion. are performing. That’s an above-average growth of BURGER almost 7 percent, the chain’s highESTIMATED 2001 CHAIN SYSTEMWIDE SALES (MIL) Burgers est since 1998, when it posted an McDonald’s $20,051.5 Quick-service is here because of that quinincrease of almost 9 percent. Burger King $8,534.0 tessential American meal, the burger and Freshness is key at KFC right fries. There’s no question that the burger catnow, as it rolls out its Hot & Wendy’s $6,800.0 egory continues to dominate the industry, Fresh program at stores across Dairy Queen $2,500.0 either, as three of the top four chains in The the country. The basic premise of Jack in the Box $2,121.0 QSR 50 are first and foremost burgthe program is to cook smaller er concepts. But constant movement quantities of food more often, CHICKEN is the name of the game in the catemonitoring and controlling the ESTIMATED 2001 CHAIN SYSTEMWIDE SALES (MIL) gory, which means one of two things freshness of food served to cusKFC $4,700.0 for chains: improving existing prodtomers. “Food is served when the Chick-fil-A $1,242.0 ucts or branching out in entirely difflavor and temperature are at their ferent directions altogether. peak,” says KFC spokesperson Popeyes $1,179.3 McDonald’s, which dominates the burgMichelle Mandro. Church’s Chicken $721.1 er category and quick-service in general, Chick-fil-A again finished a disBoston Market $634.0 provides the most stunning example of the lattant second to KFC, with 2001 ter. One of McDonald’s key strengths is its sales of around $1.2 billion—a real-estate holdings, and the chain announced of product launches taking place over healthy 14-plus percent gain over 2000 that a little over a month ago that it intends to throughout 2002. Thus far the Chicken was actually the chain’s smallest increase in explore non-food retail sales at its outlets. Whopper, Veggie Burger, and Back Porch several years. The Atlanta-based chain Anything major in that regard is likely to be Griller burgers have been the notable addi- increased its menu offering earlier this year a couple of years away, but Matthew Paull, tions, and later this year the chain will launch, with the introduction of Cool Wraps; served McDonald’s chief financial officer, told The among others, two burgers intended to com- cold, the wraps come in several flavors that Wall Street Journal, “We need to think of our- pete directly with McDonald’s offerings—the take advantage of chicken’s versatility. “We selves as a retailer. What else can we do on BK 1/4-lb. Burger and the King Supreme— were very thorough in our development of the that real estate that can make us a whole lot as well as a breakfast Egg’Wich, which Cool Wrap concepts,” says Woody Faulk, of money?” takes on the Egg McMuffin. Chick-fil-A’s vice president of brand develMeanwhile, change of the other sort is in Finally, there’s a new face in the top five opment. “The end result is a new category of the air at distantly second Burger King, burger chains, and his name is Jack. San flavorful entrees that complement the qualiwhich declined more than 2 percent in sys- Diego–based Jack in the Box posted an ty products that our customers have come to temwide sales after two years of small but increase in systemwide sales of over 10 per- expect from Chick-fil-A.” LEADERS OF THEIR PACK www.qsrmagazine.com | QSR AUGUST 2002 59

QSR Magazine - The QSR 50 - August 2002

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