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Monday, Jul 22, 2024
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OC Restaurant Chains Serve Up 6.4% Sales Growth

Despite facing rising costs necessitating price hikes, Orange County’s collection of restaurant chains with regional headquarters reported multiple gains in 2023.

The 28 companies on the Business Journal’s annual list of restaurant chains, ranging between fast-casual and full-service models, generated 12-month systemwide sales of $34.7 billion for 2023, increasing 6.4% from the year prior.

Nineteen chains, such as No. 3 In-N-Out Burger Inc. and No. 2 Chipotle Mexican Grill Inc. (NYSE: CMG), reported year-over-year revenue growth. Irvine’s Kura Sushi USA Inc. (KRUS) recorded the largest sales growth with a 33% increase to $187 million for the year, good for the No. 15 spot.

Kura Sushi’s number of new unit openings and increased average restaurant volumes “translated to improvement in profitability,” Chief Executive Hajime Uba told analysts.

“In spite of ongoing concerns of a deteriorating macro environment, more guests are coming to Kura Sushi than ever before. Our traffic is absolutely outperforming pre-pandemic levels,” he said.

Panini Kabob Grill in Costa Mesa, with eight locations in OC, was close behind, jumping 22% to $160 million at No. 17.

“As our industry peers resort to price hikes, we’ve noticed a significant surge in sales, as discerning diners flock to us for affordably priced yet top-tier dining experience,” CEO Mike Rafipoor told the Business Journal.

The 28 firms employ around 22,400 people, up 4.8%, across local offices and over 600 restaurant locations in OC, according to Business Journal research.

Companywide, the restaurant chains count 16,293 stores in total.

New Appointments

Several companies welcomed new leaders to their local executive teams.

One of these changes includes the rise of Sean Tresvant to CEO in January at Irvine-based Taco Bell Corp. Tresvant was previously the chief global brand and strategy officer at the taco chain and was selected by former CEO Mark King.

Taco Bell, owned by Yum Brands Inc. (NYSE: YUM), remains the largest restaurant chain based in OC and reported $14.9 billion in 12-month sales for 2023.

El Pollo Loco Holdings’ Larry Roberts announced his exit last November and in February, the Costa Mesa-based chain (Nasdaq: LOCO) appointed Liz Williams as its new CEO. Williams most previously led Outfox Hospitality as CEO and spent 10 years of her career at Taco Bell.

El Pollo Loco ranks No. 5 on the Business Journal’s list with sales of $1.05 billion for last year, up 1% from 2022.

Most recently, Newport Beach-based Mountain Mike’s Pizza LLC promoted Chief Operating Officer Jim Metevier to CEO of the pizza chain. Metevier was praised by co-owners Ed St. Geme and Chris Britt for leading much of the company’s growth since joining five years ago.

Mike Johnson of Xperience Restaurant Group, the Cypress-based owner and operator of multiple Mexican sit-down restaurants such as El Torito and Sol Mexican Cocina, was promoted from COO to CEO as well in April.

In April, Galardi Group-owned Wienerschnitzel added Doug Koob, who oversees his own contracting and consulting company Circle Alliances and previously worked with Starbucks for 20 years, as chief development officer to handle franchise operations and international expansion.

Headfirst

Food chains have been tackling California’s minimum wage increase that went into effect on April 1. A few operators have been turning to automation and robotics in the kitchen to streamline operations and offset the update.

Kiosks, digital avatars and AI are also playing a large part in order optimization, which is key to facing many of the industry changes, Steve Schulze of Nékter Juice Bar Inc. told the Business Journal.

“Businesses aren’t stupid and there’s different ways to look at challenges as opportunities instead,” he said.

The Costa Mesa-based company grew 6% to $121 million in 12-month sales last year, and Schulze is projecting $150 million for 2024. Nékter plans to open 50 new locations this year.

Habit Restaurants Inc., another Yum Brands chain, tried countering rising costs with “adult kid’s meals” to its menu for a short time in March. The Habit, ranked No. 7, reported sales of $696 million for 2023, up 5%.

Flame Broiler Inc., based in Santa Ana, has seen the founder’s sons, President Christian Lee and Chief Innovation Officer Daniel Lee, gain more responsibility in the past year. While reporting sales fell 16% in 2023 to $72 million, the Korean chain recently restarted its franchising program after taking a pause five years ago.

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.
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