As consumers ponder cutting down on spending in the face of high inflation, the QSR sector seems to be maintaining relatively steady visitation patterns. We dove into year to date offline visits to leading brands to see how the various QSR subcategories are faring. While the data doesn’t fully capture delivery orders or drive-thru visits, the foot traffic numbers can still provide a rough sense of the state of the sector going into the second half of 2022.
Burger Leaders – McDonald’s, Wendy’s, and Burger King
Year-over-year (YoY) visits to Wendy’s and Burger King are up, but year-over-three-year (Yo3Y) visits are down. And while it’s important to note that these numbers don’t include all drive-thru and delivery orders, May 2022 Yo3Y foot traffic to the leading QSR burger brands underperformed offline visits trends to the wider fast food and QSR category.
Of the three burger leaders, McDonald’s is showing the best performance, with Yo3Y in April 2022 up by 6.3% and May 2022 Yo3Y visits up by 3.8%. McDonald’s has also seen the strongest YoY growth, with monthly YoY foot traffic up by double digits every month this year. It is also worth noting that McDonald’s has been shrinking its physical footprint, which makes the rise in Yo3Y monthly traffic all the more impressive.
Meanwhile, Wendy’s and Burger King are experiencing a more challenging situation, with May 2022 foot traffic down 12.1% and 12.4%, respectively, when compared to May 2019. And while their YoY numbers are positive, the growth is not as significant as might be expected given the comparisons to the unique environment in 2021.
With regards to Burger King, some of the drop in visits is likely due to store fleet consolidation. Burger King has been closing underperforming stores since 2019 as parent company RBI focuses on international growth. But visits per venue have also been down, with May 2022 visits per venue 10.4% lower than in May 2019, which means that brand’s right-sizing is not yet over.
Wendy’s has attributed its Q1 2022 low foot traffic numbers to the particularly cold winter and to a slow-down in traffic from lower-income consumers. The chain also invested heavily in its breakfast menu, but as office workers have been slow in returning to the office, breakfast sale growth has stalled. To offset these temporary challenges, the brand has decided to increase prices – which may help offset some of the visit losses in Q2.
Regional Burger Chains – In-N-Out Burger, Whataburger, SONIC Drive-In, and White Castle
While burger leaders are staying at or below 2019 visit levels, smaller regional burger chains are showing impressive growth. Monthly Yo3Y visits to In-N-Out Burger, Whataburger, SONIC Drive-In, and White Castle in May 2022 grew by 38.5%, 14.0%, 20.8%, and 8.5%, respectively, significantly overperforming the wider fast food & QSR category, which was down 0.6%. All four chains have also seen consistent Yo3Y growth in visits per venue this year.
This may indicate that the burger leaders’ subdued foot traffic numbers do not necessarily reflect a waning demand for QSR. Rather, as more and more people look to reign in unnecessary spending, consumers may be limiting their overall spending and this category is able to take advantage of a wider percentage of overall QSR visits.
Chicken Leaders – Popeyes, KFC, and Chick-fil-A
Foot traffic performance for the chicken QSR category was mixed in the first half of 2022, with Popeyes Louisiana Kitchen seeing impressive Yo3Y growth while Chick-fil-A visits stayed relatively on par with pre-pandemic levels and KFC visits seem to have dropped significantly.
Popeyes’ visits, March through May 2022, stayed relatively close to 2021 levels while the brand’s Yo3Y visits jumped – which could indicate that Popeyes is still riding the wave of its chicken sandwich visit bump. In contrast, KFC’s chicken sandwich launch in early 2021 doesn’t seem to be having the same effect – although it’s important to note that KFC’s foot traffic numbers may not include all the digital order “Quick Pick-Up” visits which the brand has been investing in heavily.
Meanwhile, Chick-fil-A seems to be maintaining pre-pandemic visit numbers thanks to its significant store fleet expansion – monthly average visits per venue were 8% to 20% lower between January 2022 and May 2022, which may indicate that the brand is opening venues a little faster than it can fill them.
Tex-Mex Leaders – Chipotle and Taco Bell
Compared to the wider QSR sector, Tex-Mex brands Chipotle and Taco Bell have been performing well. Chipotle in particular has seen its monthly foot traffic up both YoY and Yo3Y every month of 2022 so far. Taco Bell also started off 2022 lagging behind its pre-pandemic visit levels but has now reached visit growth, with May 2022 visits up 7.9% relative to May 2019 – perhaps thanks to the re-launch of its highly popular Mexican Pizza.
Both Taco Bell and Chipotle have been leaning into digital orders and drive thrus to fuel growth. Their impressive foot traffic numbers prove once more that online and offline success do not need to come at the expense of each other. Instead, a well executed omnichannel dining strategy leverages the strengths of each channel to create a larger whole.
For more data-driven dining insights, visit placer.ai.
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