The largest fast-food chains in the U.S. have not only recovered from the ongoing pandemic in terms of sales, most of them are now growing at a clip that exceeds pre-Covid levels, at least in the U.S., according to the latest round of quarterly earnings that were announced over the last couple of months.
It’s a combination of new product offerings, promotions, some creative marketing and perhaps a little pent-up demand that is fueling the growth.
This year alone has seen several chains introduce new chicken sandwiches, some from familiar names and otheres maybe not so familiar, including McDonald’s, Wendy’s, KFC, Zaxby’s (which recently nabbed an investment from Goldman Sachs), Golden Chick (which has some 190 locations largely in the South), and Checkers & Rally’s, among others.
Wendy’s and McDonald’s have perhaps been among the most aggressive in product development. For example, the two brands have added a mix of new breakfast items to complement their latest sandwich offerings.
It’s paid off in their earnings. Wendy’s continues to benefit from its new offerings, which also included an upgraded version of its pretzel bun, with same-store sales growth of 7% in the U.S. for the third quarter ended Sept. 27. That compares to 4.5% for the same period a year prior. Comparable sales at Wendy’s grew 6.1% globally.
On the other hand, McDonald’s is generating growth on par with its pre-pandemic trajectory. The brand reported comparable sales growth of 4.6% in the U.S. for the third quarter ended Sept. 30 versus with 4.8% a year ago. Globally, however, the world’s largest fast-food chain saw same-store sales continue to decline, though at a lower level, falling 2.2%.
Pizza chains, for their part, are simply cashing in on doing what they’ve always done. As such, they continue to eclipse their performance in recent years. In fact, Papa John’s had the biggest comparable sales growth of the largest, publicly-held chains in the U.S. with an increase in North America of 23.8% in the third quarter ended Sept. 27. That compares with a mere 1% growth during the same period a year ago. Internationally, Papa John’s same-store sales grew an equally impressive 20.7%.
Domino’s, similarly, reported comparable sales growth of 17.5% in the U.S. for the third quarter ended Sept. 6, versus an increase of 2.4% a year ago. Internationally same-store sales at the company grew 6.2%.
It’s not just pizza that’s proving popular. Burger chain Jack in the Box and chicken specialist Popeyes joined the pizza chains in the double-digit growth club. It said same-store sales grew 12.2% in the U.S. for the fourth quarter ended Sept. 27. That compares with growth of 3% for the same period a year prior. Popeyes continued to capitalize on the popularity of its chicken sandwich, for which there appears to be no slow down, by reporting comparable sales growth of 19.7% in the U.S. versus 10.2% a year ago. Globally same-store sales at the chicken chain grew 17.4%, it said.
Fast-casual chain Chipotle also continues to shine, with more than respectable same-store sales growth of 8.3% for the third quarter ended Sept. 30, though it was below an increase of 11% a year ago.
However, across conglomerates, the recovery trajectory differs from chain to chain. While Popeyes is the jewel in the crown of Restaurant Brands International as far as sales are concerned: Its other brands Burger King and coffee chain Tim Horton’s continue to struggle somewhat. Burger King, for example, saw same-store sales declines of 3.2% in the U.S. and 7% globally, while Tim Horton’s fell 13.7% in its home market of Canada and 12.5% globally.