Business is strong for Orange County-based restaurant chains, mirroring a year of eating heartily nationwide.
That’s the “takeout” from this week’s list of the biggest chains based here.
“You’re seeing more of a lifestyle focus [in restaurants], and the economy is improving,” said Darren Tristano, executive vice president with Chicago-based restaurant industry researcher Technomic Inc.
He said both trends mean diners spend more money for the food they want—and restaurant chains are growing as they move to meet those desires.
The Business Journal’s 2015 list of 32 restaurant chains based here and ranked by systemwide sales reflects this:
• Total sales are nearly $15 billion a year, up about 6% from last year.
• The chains added about 400 workers combined, up 2.2% to nearly 18,000.
• They added eight locations in OC and 513 systemwide.
More than half of the chains showed a sales increase in 2014 over 2013.
The Business Journal estimated sales for eight chains and got estimates for 10 others from Technomic.
The other chains provided sales figures for the list.
Big Ticket
One area of local industry activity in the past year was in companies going public.
Two listed companies—No. 3, El Pollo Loco Holdings Inc. in Costa Mesa, and No. 14, Habit Restaurants Inc. in Irvine—made initial public offerings last year. Both were recently trading at market values of $800 million to $900 million. Habit’s sales were up 45% last year to $174.6 million.
A third chain—Lake Forest-based Del Taco, No. 4—is about to become a public company via an acquisition by a company that already is publicly traded (see related story, page 1).
Perennial No. 1, Taco Bell, which has headquarters in Irvine and operates as part of Louisville, Ky.-based Yum Brands Inc., increased system wide 2014 sales by 5.1% to $8.2 billion and added 430 restaurants for a total of 6,199.
No. 2, BJ’s Restaurants Inc. in Huntington Beach, grew sales 9.1% to $845.6 million and opened eight restaurants.
The 159-location casual-dining chain has streamlined new restaurant design, sought efficiencies in food buying, and invested in technology for its website and with a loyalty and ordering smart phone app, said Kevin Mayer, a BJ’s executive vice president and its chief marketing officer.
“We’ve seen significant increases in mobile and website traffic,” he said.
The biggest boost in sales has come from menu changes since hiring a new executive chef 18 months ago, he said.
“We’ve brought a craft approach to the culinary side,” he said, while aiming for “simplicity and speed” in getting that food to the customer.
Possible Spinoff?
A candidate for further public markets activity is No. 6, Yard House USA Inc. in Irvine, which has been the subject of recent speculation that public parent, Orlando-based Darden Restaurants Inc., will spin it off.
“Yard House is growing—craft beer is popular and [Yard House offers] an elevated experience,” Tristano said.
Its sales rose 15% last year to $425.6 million.
He suggested that Darden might hold onto the chain because, “the premium side tends to be the greatest opportunity for sales growth,” but it’s also part of Darden’s, “highest-value [division], so if they’re going to sell [restaurants], that’s where it would be from.”
Changes
Two chains join the list this year:
• No. 29, Paul Martin’s American Grill in Newport Beach, had a 46.2% increase in 2014 sales to $34.5 million, with the addition of three restaurants for a total of nine units in the company.
• Santa-based Nekter Juice Bar Inc. debuts at No. 32, with an estimated $24 million in systemwide sales.
Three chains—No. 9, Mimi’s Café in Irvine, No. 11, Sizzler USA Inc. in Mission Viejo, and No. 28, Golden Spoon Franchising Inc. in Rancho Santa Margarita—showed year-over-year sales drops, according to the list.
