If there was a quick-service restaurant selling hamburgers in 2021, consumers were there to eat them. After the QSR burger segment took a tumble in 2020, falling 5.3 percent, it grew sales 18.3 percent in 2021, to $176 billion, far surpassing even its pre-pandemic performance in 2019 of $157.2 billion.
The 15 QSR burger chains not only combine to make up the largest restaurant segment, but the largest of any category on the Franchise Times Top 500, an annual ranking of the 500 largest U.S.-based franchise systems by global systemwide sales. Not only did these concepts recover from their COVID sales slumps, all but two on the list—Krystal and A&W—beat 2019 sales, and those that were top performers in 2020 did even better in 2021.
Sonic Drive-In followed up its 21.2 percent increase to lead in 2020 by adding another $155 million, and McDonald’s, which was down 6.8 percent in 2020, made a dramatic showing by growing sales more than $19 billion to stay atop the overall ranking with $112.5 billion in system sales. Part of No. 4 Burger King’s 17 percent sales lift came from major unit growth, to the tune of 622 locations to reach 19,247 global units. Its sales surpassed $23.4 billion. Iconic Texas brand Whataburger pushed sales up 14.5 percent, to cross the $3 billion mark.
Wisconsin-based Culver’s, meanwhile, turned in another double-digit sales growth year, up 25.3 percent to $2.5 billion, as it maximized its drive-thrus while also quickly reopening its dining rooms.
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“Our focus became almost single-mindedly on recruiting team members,” said CEO Rick Silva, which in turn meant Culver’s could handle customers in and outside its 837 restaurants. “You score huge points, especially when the competition can’t do it.”
Culver’s CEO Rick Silva says the brand “grew share dramatically in 2021.”
Silva, who joined Culver’s in late March 2021 after 13 years as CEO of Checkers & Rally’s, said operators were able to “steal share across the board but particularly in the dining room” as some of their QSR competitors and many other restaurants kept dining rooms closed. Culver’s is positioned well within the category, he continued, “priced a little above folks” in QSR “but a little less” than others in the fast-casual segment.
“We win the value battle not by racing to the bottom but by delivering a premium experience,” Silva said.
At CKE Restaurants, parent company of Carl’s Jr. and Hardee’s, CEO Ned Lyerly said a rebuilt tech program and mobile ordering were key to each brand’s sales growth. Carl’s Jr. was up 51 percent, to $2.2 billion, with Hardee’s up 20.7 percent, to $2.4 billion. Both recovered and then some from double-digit percentage declines in 2020.
“We definitely went on the offensive early in COVID to pull the brands forward,” said Lyerly, with the launch of the company’s first-ever loyalty app and delivery integration all playing a role. “We rebuilt our tech program and rolled out mobile ordering—that was awesome.”
Ned Lyerly, CEO of CKE Restaurants, says a “basket builder program” for digital ordering is one way Carl’s Jr. and Hardee’s are growing sales.
Menu innovation and marketing campaigns went hand-in-hand, Lyerly pointed out, as with a new hand-breaded chicken sandwich advertised on OnlyFans via Vice’s Munchies channel. Hardee’s and Carl’s Jr. are known for their edgier ad campaigns, and marketing activations on OnlyFans, Adult Swim and video game live streaming platform Twitch “present our brand in a very youthful manner,” said Lyerly. “And we need to reach our guests through all channels and younger channels. We continue to adjust advertising allocation from traditional broadcast forms to digital channels.”
CKE launched a market transformation initiative last year with plans to update more than 500 restaurants across both brands (Hardee’s has 1,752 units in the U.S., Carl’s Jr. has 1,066). The reimaging will include new digital menu boards at the drive-thrus and inside restaurants, new equipment and streamlined menus. The company is investing $60 million to overhaul corporate locations, while franchisees are expected to invest more than $400 million in the updates.
“We’re transforming our system on a market-by-market basis, to have more impact than a disparate approach,” said Lyerly. “Our first proof market” in South Carolina “has outperformed expectations” with sales up 16 percent over the rest of the system.