This post is part of the On the Margin blog.
The hottest restaurant chain in the country, once again, is open only six days a week and served a menu loaded with chicken.
Chick-fil-A, the Atlanta-based quick-service chicken concept, continues to grow at a rate almost too astounding to believe.
Over the past five years, Chick-fil-A’s systemwide sales have increased nearly 73 percent, to nearly $7.9 billion from $4.6 billion, according to newly released NRN Top 100 data.
It will likely overtake Dunkin’ Donuts as the 7th largest restaurant chain in the country some time this year.
Chick-fil-A does this with unit volumes far and above any of its competitors.
Consider this: Its unit volumes are nearly $3.9 million, up 10.7 percent over last year. Over the past five years, Chick-fil-A’s estimated unit volumes have increased more than 39 percent, based on NRN Top 100 data.
It does this even as it closes Sundays and closes its restaurants every night, avoiding the trappings of 24-hour drive-thrus or holiday openings aimed at bolstering sales.
Chick-fil-A’s unit volumes are the 11th best among the 100 largest chains, according to NRN data. And every one of the 10 chains with higher volumes are full-service concepts with much higher average checks or, in the case of No. 1 Dave & Buster’s and its $11.7 million unit volumes, a massive games area.
The chain has much higher volumes than McDonald’s Corp. ($2.5 million) as well as casual-dining chains like Red Lobster ($3.6 million) or Buffalo Wild Wings ($3.2 million) that sell alcohol.
Those unit volumes have also come even as the chain has peppered the country with a lot more Chick-fil-As.
The company had 2,085 locations as of the end of 2016. That’s up 25 percent from five years ago, when Chick-fil-A operated 1,669 units.
Traditionally, rapid expansion hurts unit volumes, because a new location cannibalizes another unit nearby. In this case, it’s only helped matters — Chick-fil-A’s estimated unit volumes have grown at a rate faster than its unit volume growth.
The company has thrived in outer suburban markets where site costs are cheaper and competition is less fierce. But in recent years it has taken big risks, moving into bigger, bluer markets like New York City — where the chain’s restaurants generate long lines of customers eager for a chicken sandwich.
And Chick-fil-A, for what it’s worth, has done more to go after those urban customers. Earlier this year it started selling a gluten-free bun. In 2014 it agreed to stop sourcing chicken treated with any antibiotics — making it a relatively early mover in the no-antibiotic movement.
It’s difficult to assess how long Chick-fil-A can keep up this run. The law of averages suggests that the bigger a company gets, the slower its sales. But Chick-fil-A’s unit volumes have grown at a higher rate over the past two years than any other chain on our Top 100 — which is remarkable for one of the 10 largest chains in the country.
Suffice it to say, this is Chick-fil-A’s world. We’re all just living in it. And eating its chicken sandwiches.
Jonathan Maze, Nation’s Restaurant News senior financial editor, does not directly own stock or interest in a restaurant company.
Contact Jonathan Maze at [email protected]
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