Panera, Chipotle, Buffalo Wild Wings Hunger for Growth
Forget the gloom-and-doom about chains closing their doors or cutting back on growth: Fast-casual dining continues to expand fast. Three of the largest players in the space, Panera Bread Company (PNRA), Chipotle Mexican Grill (CMG) and Buffalo Wild Wings (BWLD) are all hungry for expansion.
- Panera, with 1,380 U.S. locations, wants to build 80 to 90 new units this year. The St. Louis-based outfit, got an 8.4 percent sales boost during its fourth quarter at restaurants open at least a year. Profits rose 25 percent.
- Chipotle, based in Denver, plans to add 120 to 130 new locations in addition to the 950 it already operates. In the fourth quarter, same-restaurant sales were up 2 percent, while net income soared 86 percent.
- Wild Wings, of Minneapolis, plans to increase its store count of 658 locations by 15 percent. Its fourth-quarter revenues increased 19.6 percent, and net earnings grew 7.9 percent.
If the economy worsens, consumers could trade down further, from Panera, say, to recession darling McDonald's (MCD). That would make these aggressive growth plans look like a big mistake. In this sense, the three chains are betting as much on economic recovery as their own business models.
Interested in Fast-Casual Franchising?
At Panera Bread, total startup costs can run from just over $1 million to $2.5 million after fees, payroll, signage and other expenses.
Buffalo Wild Wings requires minimum liquid assets of $1.5 million and net worth of $3 million.
Chipotle doesn't offer franchising.