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Chick-fil-A is the third-largest fast-food chain in America, and that should terrify Wendy's and Burger King

Chick-fil-A

  • Chick-fil-A was the third-largest restaurant chain in the US by sales in 2019, bringing in $11.3 billion. 
  • The chicken chain managed to make more money than rivals, such as Taco Bell, Burger King, and Wendy's, that have more than twice as many locations across America. 
  • Chick-fil-A's success is dangerous for fast-food rivals, as customers flock to the chicken chain as it steadily opens more locations. 
  • Visit Business Insider's homepage for more stories.

Chick-fil-A is inching closer to McDonald's title of the biggest fast-food chain in America. 

In 2019, Chick-fil-A was the third-largest restaurant chain in the US by sales, according to a recently released Technomic report.

The report estimates Chick-fil-A brought in $11.3 billion in sales in 2019. Starbucks was ranked second, with $21.4 billion in US sales and McDonald's was in the top spot, with a whopping $40.4 billion. 

Chick-fil-A grew sales by nearly $1 billion over the last year, up from the $10.4 billion it made in US sales in 2018.

The chicken chain outperformed fast-food rivals that have many more locations across America. At the end of 2019, Chick-fil-A had 2,470 locations in the US, according to Technomic data reported by Restaurant Business. That represents an increase of about 100 locations since the end of 2018. 

For comparison, Taco Bell brought in just under $11.3 billion in sales with 6,766 locations last year — almost three times as many as Chick-fil-A. Burger King (No. 4) made about $10.2 billion in sales with 7,346 locations and Wendy's (No. 7) brought in $9.8 billion with 5,852 locations. 

Chick-fil-A's success is bad news for fast-food rivals, especially as the chain continues its steady expansion outside the South. Last year, a Gordon Haskett analysis revealed that in the first six months after a new Chick-fil-A opens, customer traffic falls an average of 5.4% at nearby Wendy's locations, 4.4% at Burger King, and 1.5% at McDonald's.

Why Chick-fil-A is able to dominate the competition

Chick fil A

Chick-fil-A manages to have such impressive sales with fewer locations than competitors because each location makes significantly more than rivals' restaurants. A Chick-fil-A location makes more than $4.5 million in sales on average, compared to a McDonald's location, which makes about $2.9 billion. 

The chicken chain's unique franchise system, in which each owner only runs a single location, gives Chick-fil-A a competitive edge in fast food. Chick-fil-A also has set itself apart from rivals with its long-term focus on customer service and more recent investments in technology.  

Kalinowski Equity Research founder Mark Kalinowski told Business Insider last year that Chick-fil-A is only going to continue to grow in the coming years, chipping away at Starbucks' and McDonald's top spots in the ranking. 

"They're severely under-penetrated," Kalinowski said. "Once you start looking at all these other big metropolitan areas in all these states, there's room for growth for, not just years and years to come, but potentially decades to come."

While Chick-fil-A does not release sales figures as a private company, all fast-food chains have been hit hard by the coronavirus pandemic in recent weeks, meaning 2020 sales figures are unlikely to be as impressive. Chains such as McDonald's, Burger King, and Taco Bell reported that sales dropped by 20% to 35% in late March, and have since started to recover. 

SEE ALSO: The church of chicken: The inside story of how Chick-fil-A used Christian values and a 'clone army' to build a booming business that's defying the retail apocalypse and taking over America

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