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Quick Service Restaurants continue to lead retail absorption

Strategic Retail Group, retail trends blog, restaurants

Over the course of the Great Recession, there has been one shining star that has continued to absorb space and keep retail vacancy at reasonable rate. Quick Service restaurant chains have been aggressive in the market and competition for high quality restaurant space has remained high, demanding premium economics for high quality space. 

Quick service restaurants have continued to see strong sales growth over the recession.  According to a report by Technomic’s (1), fast casual chains grew by 11% and store count grew by 8% in 2013. This sales growth trend shows no signs of stopping. In a report released by Nation’s Restaurant News (2) earlier this month, same store sales are up 2.9% year over year in August, with average two-year same store sales being up 4.1%.

In the Phoenix market, there has been high demand for highly visible out parcel space from these users. The bankruptcy of Blockbuster Video and Hollywood Video allowed many of these users to slug it out for prime end caps in desirable locations. Several new development or re-development projects around the market have focused on delivering space for these growth restaurant concepts.

In addition to the major national chain growth, several categories are trying to capture similar success that Chipotle has had in the Mexican category. Pizza has seen the onslaught of fast-fire pizza chains like Pieology, Pizza Studio, MOD Pizza, Blaze Pizza, and even local users Fired Pie and My Pie, aggressively looking for locations in the market. QSR noodle concept from Denver, Noodles and Company, has announced a desire for new locations in the Phoenix market. There has even been start up QSR concepts like Gadzook’s and Fooshia jumping on the bandwagon and absorbing space.

Here is a short list of active QSR’s and their aggressive growth plans for the next year:

- Starbucks Coffee – Current locations: 18,000 units. 12 month growth: 200 units.

- Dunkin Donuts – Current locations: 15,000 units. 12 month growth: 280 units.

- Chick-Fil-A – Current locations: 1,700 units. 12 month growth: 60 units.

- Chipotle – Current locations: 1,450 units. 12 month growth: 175 units.

- Panera Bread – Current locations: 1,708 units. 12 month growth: 105 units.

- Little Caesars Pizza – Current locations: 2,400 units. 12 month growth: 50 units.

- Five Guys Burgers and Fries – Current locations: 750 units. 12 month growth: 600 units.

- Smash Burger – Current locations: 150 units. 12 month growth: 100 units.

- Jimmy John’s – Current locations: 1,600 units. 12 month growth: 200 units.

- Jersey Mike’s – Current locations: 650 units. 12 month growth: 75 units.


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By: Kalen Rickard

Vice President, Strategic Retail Group

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