Americans aren’t eating burgers anymore
By Lisa Fickenscher New York Post Business Section August 12, 2016
A new chapter in the burger wars is starting to sizzle — but don’t expect dollar meals at any of these joints.
The latest burger battle is being waged in the $3 billion better burger segment — where Five Guys, Shake Shack, Smashburger and at least 30 others serve up $8-plus burgers made with fresh beef and no preservatives.
The sector was red-hot a decade ago — and attracted lots of new entrants, many with a plan to blanket the country with stores.
But business began to fall several years ago — and with many chains still pursuing aggressive expansion plans, some are predicting a shakeout is coming.
For starters, Americans are eating less beef than they used to — about 1.2 fewer pounds per person per year since 2012, according government data.
Tastes are shifting to chicken, USDA data show.
The shift — and the crowded nature of the sector — was in full view on Wednesday when Wall Street darling Shake Shack reported same-store sales gains slowed more than analysts had forecast.
The Danny Meyer chain saw sales gains at its existing stores slow to 4.5 percent — compared with 12.9 percent a year ago and 9.9 percent just a quarter ago.
“It seems like the mid-scale burger market, for a $10 or $12 burger, is only so big and there have been too many stores that have popped up, outstripping demand,” said John Gordon, principal of Pacific Management Consulting Group.
Privately held Five Guys, with some 1,000 stores, is the largest player in the better burger field — and it’s hit some speed bumps, say industry experts who point to struggling franchisees the company bought to avoid closing the stores.
“Five Guys has dramatically slowed down,” said Bob Goldin, vice chairman of Technomic, which tracks the restaurant industry.
Five Guys did not return a call for comment.
Smashburger, with 372 stores, is the second-largest in the sector. It has also bought back some of its restaurants from franchisees, in Las Vegas, San Diego, New Jersey, Dallas and Phoenix.
The buybacks are not a sign of weakness for the 9-year-old privately held company, said co-founder Tom Ryan.
Smashburger, which serves Angus beef, salads and sides like veggie frites and about eight different chicken sandwiches, is opening 50 to 60 restaurants a year and has signed the franchise rights for 200 stores in 2016, Ryan said.
Enter North Palm Beach, Fla.-based BurgerFi, the fastest-growing of the better burger joints, with 89 eateries and another 11 set to open this year.
There are 175 in the pipeline, according to Chief Executive Corey Winograd.
With so-called $10 CEO Burgers, $7 VegeFi burgers and sales of $1.4 million per store on average, BurgerFi hopes to muscle its way through the crowded sector.
It hopes to go public, but is keeping all option open — including remaining private.
But unlike Shake Shack, which is targeting premium sites in major cities, BurgerFi has its sweet spot in bedroom communities like Silver Spring, Md., Winograd said.
BurgerFi is also making a big bet on a non-beef item.
It wants to take its veggie burger, made from quinoa and lentils, into retail stores.
“We think our VegeFi is a game changer,” Winograd said.
25 comments:
The Five Guys in my area WAS good and was jam packed. Now, its only half-full when I walk by. Their quality went way down.
$8 hamburgers may work in joints that serve drinks, but not in a mere hamburger shop. I have a personal thing about hamburger, but if I did indulge I would be more inclined to support the local mom and pop drive in burger joint or a regional chain like Culver's.
Evi: I had a butter burger in Wisconsin at the Richland Center Culver's. But you know what was better, hooves down? Friday Fish Fry at Fitz's on Lake Wisconsin, washed down with a Spotted Cow, followed by ice cream at the Merrimac Ferry.
Ice cream was Door County Cherry, natch.
Five Guys does great French Fries, and a good BLT.
You can never go wrong with a Spotted Cow, through I love Fat Squirrel too.
And Door County cherries are the best.
Americans are eating less beef than they used to
Tastes are shifting to chicken
People are eating less beef because of the cost. $3.50 + per pound of 25% fat ground beef.
What about "the other white meat"? Or is that becoming taboo too?
I had some excellent barbecue in Tennessee just the other day.
My hosts in Arkansas said everybody eats barbecue in Hot Springs but they balked at going to McClard's because of the Clinton connection.* So, we had fish instead. I had catfish and hush puppies and blackeyed peas. I looked for pokeweed salad but I'm afraid that's only a Carolina thing. Maybe Sixty knows.
______________
*I laughed at hearing about McClard's because not knowing the spelling I assumed it was McLard's
How come Lem didn't have any posts on the Olympics? I watched Phelps help win that gold medal in the men's relay on the first or second night. An old friend (lib) told me recently "Michael Phelps is an asshole" to which I retorted "you know who else is an asshole?-- Michelle Obama. Did you know that only reason she suddenly likes gymnastics is because it's black girls?"
Who is right?
Five Guy's never did well down here. Too close to a Whataburger. Same with the Smashburger.
I just had a burger today at one of my local joints...who make super cool fries also! And good donuts as well...
I was underwhelmed with Five Guys...A lot of good places that are both better and even cheaper around here.
Had a Five Guys a few days ago, very tasty. Though really, when I was twelve and working at Top Dog we had a ten cent burger that was killer. Bread, meat, and our special secret sauce, that's all. Truly, it was delicious. So anyway, mostly a burger is a burger, if you're hungry it's good, if not so hungry it may be mediocre. It's American though, so there is that.
It used to get White Castle murder burgers on Broadway in Bed Stuy in the 1960's. Best burgers I ever had. It was a luncheonette not a fast food joint.
The best hot dogs were at Chock Full of Nuts. Even better than Nedicks.
Yep, White Castle good, Down south it was Krystal burgers after the late night drunk. You could eat damn good for a dollar. Course, that was an hour's wages too.
There's a Burger Fi downstairs and it's great. They're a bit expensive. They brag about the quality of their meat. No growth hormones and such. They also offer upscale hotdogs, but honestly, how good can hotdogs get? They're nothing to write home about
This is about upscale hamburger market being saturated. Burgers aren't going anywhere, and you have to laugh at, "first, people are eating less beef generally. Down 1.5 Lbs a year. Hang on I feel a laughing fit coming on.
HA HA HA HA HA HA HA HA HA
Hmmn, that wasn't so bad as I thought.
But what's weird, looking at this analytically *rubs chin pensively* An Arby's 1/2 a block away was doing okay. In 10 years I went there 3 times but there were always people in there. Changed to Torchy's, a Tex-Mex fast food soft taco place and it does a stupendous business. Lines everyday. I've been there 6 times already.
And not just regular lines, no, these are l-o-o-o-o-o-o-o-ng lines that run the full length of the building to the door and outside the door and wrap back around in an orderly fashion. People self-organize. People actually wait outside. And inside it's noisy as hell and with the feel of a bus station. Their prices are low. And their food is outstanding.
There's your winning formula right there. Great fast food at a low price.
Like the tamale lady who doesn't bother with a license. Doesn't she appreciate the mob, I meat to say the state, demands it's take simply by lording over its realm? And what, provide police protection, I suppose.
Also they have a bar but I never used that on account of not really digging alcohol. Actually, Burger Fi offers alcohol too.
You know what? Y'all are a bunch of lushes.
Not you of course, but all'ya other y'alls.
~*~*~*~*~* twinkling music dividing segue * ~*~*~*~*~*~*~*
I wish I had time-lapsed tonight's sunset. Just outstanding. Good clouds and fantastic mysterious orange in the distant west, way, way, west, past the mountains, like Utah. Perhaps fires somewhere. It tinged the distant clouds beautifully as the sun set behind the mountains and caught the edges of near ones. I did take a series of individual shots but a time lapse would have been really nice tonight.
~*~*~*~*~* another twinkling music divide * ~*~*~*~*~*~*~*
I noticed that when the midday sun finally hits the morning glories with its powerful unfiltered direct light that all the thin delicate leaves curl as if the plant is dying and struggling for lack of water. But they are not in need of water. It's their response to protect themselves from burning. Soon as the sun eases in the afternoon they spring back to shape. But they do suffer in direct hot high summer sun.
Other plants react similarly. The oxalis triangularis folds its leaves so that less sun hits them, then spread out again when it's safe.
I find them fascinating to watch. The morning glory vines grow so fast that you can actually see their new growth each day. They're spreading nicely across the balcony putting all their energy into extending their vines and none into producing flowers. Presumably they'll have enough time to do that and form seeds. We'll see. It's been a strange year. Long cold wet Spring that prevented planting, and it's already snowed at the top of Pike Peak indicating an early Fall this year. A compressed summer season.
We gardener types are very alert to the weather and climate.
@Chip: I stopped at Charlie Brown's (10th ad Grant) last week and should have mentioned it here. I used to be a regular there back in the '90's. My son wanted to see the place because his mother and I talked about it so much. I was pleased that so much was still the same. The breakfast was still good. I didn't have a drink but I'm sure that's the same too. I learned that Paul, the resident pianist had passed away 7 years ago. He was legally blind but could see and feel every song better than the sighted.
I want value for my lunch money. I like Taco Tuesdays...not to be like Hillary, I just like places that serve a decent home made taco for a bargain price.
@Evi: I am so glad that you are the den mother serving the community in its time of need!
That hamburger looks really good.
The thing is, though, a double hamburger like this, made of substantial patties, is really too much to fit in your mouth. It has to be smashed. Better to have 2 regular hamburgers. Unless they're McPatties, then that's different. Those things are thin and double makes sense.
I fry my own hamburgers using ground beef I buy from the person who raises the beeves. If there is going to be spit in my food I prefer that it be my own.
As for Phytolacca americana, I grow a lot of that here - it makes a great natural screen along one's property line, is tall, dense, and biennial. I have a bumper crop growing this year.
As for consuming any of it - no way - the toxicity of that plant makes me very leery of it, regardless of how it is prepared. If I wanted bitter tasting foul mushy leaves I would eat kale. What I am saying is vegetables are horrible enough without using a poisonous plant as the foundation of your salad.
One reason I continue to allow that plant to flourish on my property is that it attracts birds - they can eat the berries and they are not affected by the toxins. They also propagate the plant so that in no time at all you have more pokeweed than you know what to do with. Well, I know what to do with it - apply plenty of Roundup. It is effective against those plants and Ailanthus altissima too. Must do what I can to keep the invasive species at bay. But feeding birds with no expense or effort is a worthy goal, and my yard is becoming a nice sanctuary.
Michael Phelps is from Baltimore. What is he like as a person? Who knows. Who is doing the reporting? If someone wants to call him names the correct response is "Scoreboard!". Dude has won more medals than any other Olympian ever. Perhaps he is overly focused on what he does. So what - he is successful at it, and once he truly retires perhaps he will work on other things. Like counting his money. And dodging bullets. Both are useful skills in his hometown.
One more subject - around here the big deal is raw milk. My family was involved in Public Health and I for one, appreciate the work that Louis Pasteur did. Sure, the FDA is a monster bureaucracy, far overreaching its limits and skill set, but they exist for a reason. Not sayin' that the tamale peddling woman is Typhoid Mary, but she could be.
Upton Sinclair rant mode off.
I've flirted with the idea of switching my franchise affiliation and have eaten a lot of burgers at other joints as part of my research. The best burger I've found is Cheeburger Cheeburger, a small chain that originated in Sanibel, Florida. Five Guys does nothing for me. The burger is good enough, but a burger, fries, and a drink run in the $13 range. Wayback Burgers and Mooyah are two other up and coming chains.
The thing theses guys all have in common is the price. All are in the $11-$15 range for a sandwich, fries, and drink. My sleepy little town just won't support that. The food is decent, but with the exception of Cheeburger Cheeburger, nothing to rave about.
A decent chain, with a price range for small town America, is Cookout Burgers, but they don't franchise, most have no dining room. People still line up at their drive-thru and walk-up window.
My conclusion, after all my eating and research, is that I were going to rip the current name off the building and put up something new, it'd be an independent concept. I wouldn't ever do another franchise, as it's just a new and different set of headaches.
Part of the decline in beef sales may simply be a reflection of the price of beef. Pork and chicken haven't increased as much as beef in the past ten years. Snobby hipsters will eat what they want. An $8 burger won't deter them, so a decrease in beef consumption and an increase in tofu, arugula, free range emu, and guacamole may be the result of cultural pressure other than taste preference.
My $.02.
Thanks windbag. It is good to hear from someone who knows what they are talking about.
The idea that these companies are buying back franchises is very interesting. I know this happens all the time but never to this extent.
If I was going to open a franchise I would open a "Blaze" pizza joint. It is owned by LeBron James's wife of all people. I recently went to one in Florida and I was very impressed. They had a great gluten free option that would be a huge money maker. It is the fastest growing franchise in the US.
Of course that is pizza not burgers.
"Part of the decline in beef sales may simply be a reflection of the price of beef."
That's it in a nutshell. My local Safeway is selling "New York strip" for almost $20 a lbs! It was probably $12/lbs. - 4 years ago.
Chicken breast is the same price as 85% lean beef. I see more and more Pork being sold, as people switch over.
The Jews & Muslims, though, are stuck with the Beef.
The great Jewish Dilemma: Free Pork.
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