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Fast-casual Mexican chains outpace fast-food rivals

CHICAGO As American consumers’ love of Mexican food endures, many of the nation’s top limited-service chains are enjoying sales and unit growth, with fast-casual brands supplying the majority of the action.


Chicago-based research firm Technomic Inc. found in its “Top 50 Limited-Service Mexican Chains Restaurant Report” that nine of the 10 fastest-growing limited-service Mexican restaurants brands in 2008 were fast-casual concepts.




Within Technomic’s list of the 50 largest limited-service Mexican chains, fast-casual brands grew sales by 11.8 percent to $3.7 billion and increased unit totals by 6.6 percent to 3,348 total restaurants in 2008. By comparison, quick-service Mexican chains in the study had a more modest 1.8-percent growth in sales to $7.4 billion last year, while the total number of those restaurants shrank by 0.4 percent to 7,307 units.




“Consumer demand for this crossover subsegment is driving its growth,” said Darren Tristano, executive vice president for Technomic. “Consumers are trading down from more costly casual-dining restaurants, finding they can get less expensive, fresh, high-quality food choices within a comfortable setting at these limited-service establishments.”




Technomic found that U.S. systemwide sales for all limited-service Mexican restaurants rose 3.6 percent to more than $12 billion, while unit counts grew by only 0.6 percent, compared with a 3-percent increase the year earlier.




Of all Mexican food brands, Yum! Brands Inc. subsidiary Taco Bell remains far and away the segment leader, with sales of $6.2 billion. Denver-based fast-casual brand Chipotle was second in systemwide sales, with $1.3 billion in 2008, while Lake Forest, Calif.-based Del Taco was No. 3 on the list, with sales of $560 million.




While Chipotle paced the fast-casual subsegment of Technomic’s study, posting systemwide sales growth of 20.7 percent, several competitors also had strong results in 2008, including Qdoba Mexican Grill, whose sales grew 17.8 percent to $447 million, and Moe’s Southwest Grill, whose sales increased 15.9 percent to $350 million.




Technomic also identified Chronic Tacos, a 28-unit chain based in San Clemente, Calif., as the study’s fastest-growing chain, both in terms of sales and units. The quick-service chain increased its sales 75 percent in 2008, while doubling its unit count.




Contact Mark Brandau at [email protected].



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