Restaurants ready to grow again

Restaurants ready to grow again

New report outlines unit growth plans for various restaurant chains

Looking to take advantage of attractive rents, hit markets with lower-than-average unemployment rates and develop larger brand footprints, restaurant chains, especially those in the burger and Asian segments, are set up for growth in 2011.

ChainLinks Retail Advisors, a real estate services and brokerage organization, debuted this week a National Retailer and Restaurant Expansion Guide, which suggests that many companies in the retail world are shifting into growth mode after the stagnant years of the recession.

Overall, U.S. retail expansion plans are up 40 percent this year over last, including chain stores from 7-Eleven to Walmart, as well as restaurant companies from Auntie Anne’s to Wingstop, according to the guide.

Among restaurant chains, franchise operators appear to be the most active in adding units, said Garrick Brown, research director of Sacramento, Calif.-based ChainLinks. The guide lists franchisor projections, which, he noted are sometimes established as growth targets. The guide does not include companies’ plans for unit closures. ChainLinks said it gathered the data from its brokers, clients, public-company financial reports and industry sources. There are no year-over-year comparisons.

According to Brown, burger concepts and Asian restaurants are planning the most growth this year. “Burger players like Five Guys and Smashburger are each planning at least 100 stores this year,” he said.

Among Asian brands, Panda Express is planning to open 950 units by 2015 and at least 100 units this year. The U.K.-based noodle chain Wagamama is planning 650 units over the next five years.

The guide also makes some bold projections, which Brown said are based in part on input from regional brokers in the field.

The new fast-casual Asian concept being developed by Chipotle is listed, for example. Though it’s not expected to open until summer, and growth plans have not been discussed publicly by the parent company, the guide said, “We would be surprised if Chipotle does not add at least 100 of these into the mix over the next 24 months.”

Another new Asian concept called Sunshine Moon Peking Pub in Scottsdale, Ariz., founded by P.F. Chang’s China Bistro co-creator Rich Sullivan, is projected to open as many as 10 units over the next 24 months.

The guide shows that nearly every region across the country will experience retail growth this year.

“The strongest surge in growth plans has been in those markets where unemployment is lowest,” he said. “Everyone is saying that if unemployment is 10 percent or less, we’re going in strong.”

The Washington, D.C., area, for example is “highly desirable,” with unemployement levels around 6 percent, he said. So is the Eastern Seaboard from Boston to the Carolinas.

“We have also seen a considerable increase in retailer requirements in the Chicago market,” Brown said. “Texas remains extremely popular. And though both have elevated unemployment, both Florida and California have also seen a spike in retailer demand in most markets.”

Contact Lisa Jennings at [email protected] [3].