Micro Restaurant Chains Are on the Rise

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Micro Restaurant Chains Are on the Rise

08/15/2017

CHICAGO — The next step for a successful single- to two-unit independent restaurant is to grow into a micro-chain of three to 19 units, according to The NPD Group. Micro-chains, which are often locally based, represent a diverse segment of restaurants that typically reflect emerging trends in food, a positive customer experience and hit the right buttons for restaurant customers today.

NPD pointed to growth of micro-chains' unit counts in major cities as evidence that they are resonating with today's consumers. Dallas-Fort Worth saw the strongest increase in micro-chain units, increasing 5 percent from one year ago, according to NPD's biannual restaurant census.

Micro-chain units also increased in Atlanta (3 percent), Chicago (1 percent), Houston (2 percent), Los Angeles (2 percent), Orlando (4 percent), San Francisco (2 percent), and Washington, D.C. (3 percent). Micro-chain unit counts were flat in New York City and Philadelphia, and declined by 2 percent in Boston.

"Micro-chains are bringing to the restaurant scene a new attitude and perspective," said Annie Roberts, vice president of NPD's SupplyTrack. "Many are successful because they have their finger on the pulse of today's restaurant consumer. They are often locally-based and offer their customers a creative concept, great food, and an enjoyable experience. What's not to like."

Micro-chains also fared best among restaurant chain systems, including small and major chains, in terms of orders placed and spend with U.S. broadline foodservice distributors. Chains with three to 19 units increased their total spend for foods and goods with broadline distributors by 5 percent and cases ordered by 3 percent in the first quarter of the year compared to year ago, according to NPD's SupplyTrack, which tracks monthly sales of every product shipped from leading broadline distributors to each of their foodservice operators.

Spend and cases ordered from broadline foodservice distributors also increased in many of the major markets where micro-chains saw unit growth. In comparison, total dollar spend for all restaurant and retail foodservice operators with major broadline foodservice distributors was 2 percent and cases ordered were up 1 percent.