It is a little bit scary how well Chick-fil-A did in 2018.
The chicken chain is set to become the third-largest restaurant by sales by the end of this year, according to Kalinowski Equity Research. Doing so would mean catapulting up from No. 7, past competitors like Taco Bell, Subway, and Wendy’s.
To do so, Chick-fil-A’s system sales would need to grow the 12% to 15% that analyst Mark Kalinowski has predicted. That’s a massive figure, as most fast-food competitors would be thrilled to hit 8% growth in a year. Domino’s is the only chain that is even close, estimated to grow sales roughly 12% in 2018.
The past few years have seen Chick-fil-A go from a Southern cult favorite to one of the most dominant chains in America.
The chain is entering new markets at an unprecedented clip, including opening its first store outside the US. It is doing a delivery push. It rolled out a new app. New items are popping up on the menu. The chain even tested a meal kit this year.
Chick-fil-A is a private company, but according to industry estimates, things have never been better at the chain. The chain is still the most profitable fast-food chain in the country on a per-unit basis, with a single Chick-fil-A making an average of $4.1 million in annual sales, according to QSR Magazine. By comparison, the average unit volume at a KFC location is $1.2 million.
Yet some high-profile cases throughout 2018 hinted at the fact that, while Chick-fil-A is dominant, it could face some demons in 2019 that it has been able to dodge so far.
The chain has continued to experience backlash because of its perceived stance on LGBTQ rights.
A college in New Jersey banned Chick-fil-A as a dining-hall option. The chain’s expansion in Toronto sparked boycotts. And, Twitter CEO Jack Dorsey was slammed in June for eating Chick-fil-A during Pride Month.
“Chick-fil-A is a restaurant company focused on food, service and hospitality, and our restaurants and licensed locations on college campuses welcome everyone,” Chick-fil-A said in a statement in November, after Rider University excluded the chain as a dining-hall option. “We have no policy of discrimination against any group, and we do not have a political or social agenda.”
Then, there are questions as to whether it can continue to maintain quality as the chain grows. Much of Chick-fil-A’s power is tied to its impeccable customer service and unique franchise model, which limits how many locations each franchisee can run. Often, as chains expand, they lose the control over the quality that made them beloved .
However, these potential issues haven’t hurt Chick-fil-A’s sales yet.
Maybe in 2019 Chick-fil-A will need to confront backlash and over-expansion fears head on. But in 2018 the chicken chain was dominating the industry.
Source: Business Insider