Tuesday, August 26, 2014

Sandwich menu type 5th most popular

Who doesn't love a great sandwich? Not many people according to a recent July 2014 report. “Sandwiches” is the fifth most popular menu type in the United States and chains represent the majority of sandwich restaurants, making up approximately 90 percent of the market, according to the report released by CHD Expert, a Chicago-based foodservice database and analytics firm.

Restaurants with the menu type categorized as “Sandwiches” produce an average unit volume of over $549,000. This illustrates this segment’s high-level market potential. Across America, Sandwich menu type restaurants have approximately 14 establishments for every 100,000 citizens.

CHD Expert finds that the “Sandwich” represents 6.7 percent of the U.S. restaurant market and fall behind Varied Menu, Pizzeria, Mexican, and Hamburgers, respectively. Within the Limited Service Restaurant segments approximately 82 percent of sandwich restaurants are classified as Quick Service, and approximately 16 percent are considered Fast Casual. Quick Service is defined as no wait staff with an average check of less than $8, where Fast Casual has no wait staff, but has a higher average check of $8 to $12 and usually has a more trendy/upscale atmosphere and perceived healthier menu options.

There is a dramatic divide between the numbers of Independent Restaurants compared to Chain Restaurants within the sandwich menu type landscape. Independent Sandwich restaurants account for just 9.6 percent of the market landscape whereas Chains represent the majority at 90.4 percent.

Subway is the largest chain restaurant in the United States in terms of number of locations with over 26,000 units. Other notable sandwich chains in the U.S. include Arby’s, Jimmy John’s, Quiznos, Firehouse Subs and Jersey Mike’s Subs.

Sandwich restaurants are demonstrably popular in the Midwest. Out of the 50 states, Nebraska has the largest percentage of restaurants with a Menu Type categorized as Sandwiches with 11.32 percent in this category, whereas the state only represents 0.64 percent of the nation’s total restaurants. California for comparison represents the largest total number of restaurants by state, at 12.3 percent, but only 5.17 percent of its restaurants are categorized within Sandwiches Menu Type.

The top four states with the largest percentage of Sandwich restaurants out of total restaurants are Nebraska, Michigan, Kentucky and Iowa.

Figure breaks down the sandwich menu type by
years in business. 
Based on CHD Expert’s data, owning a sandwich restaurant could be a strong investment for long-term revenue potential. A majority of Sandwiches restaurants have been in business for five years or more, representing over 76 percent of all Sandwich restaurants. However getting over that five-year hump could prove challenging, particularly as new competitors enter the landscape.

With so many of today's consumers short on time, speed of service is paramount. As such, convenience stores have risen as competitors to more traditional Sandwich establishments. Unlike Sandwich restaurants, the majority of convenience stores are Independent, with 61 percent of C-stores having fewer than 10 units. Texas is the state with the most C-stores with over 11,000 units.

Despite this emerging competition, as the data demonstrates sandwich restaurants enjoy a stable position in the U.S. restaurant landscape. The success of this menu type also presents new opportunities for foodservice operators and professionals, particularly within the franchise and chain segments.

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