July 25, 2021

Americans are getting sick of burgers — and it’s terrifying news for Five Guys, Smashburger, and Shake Shack

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file-in-n-out_burger_hamburgers_and_cheeseburgersBy Hayley Peterson From Business Insider

Americans’ appetite for burgers appears to be dwindling.

After years of soaring demand accompanied by the expansion of better-burger chains like Shake Shack, Five Guys, and Smashburger, burger sales growth in the industry is starting to slow, according to Nomura analyst Mark Kalinowski.

“It’s clear that US burger-sector same-store sales have decelerated meaningfully,” Kalinowski wrote in a recent research note. ” No longer is the burger segment a beacon of brightness for the industry, as it was in Q1 [the first quarter of the year].”

Burger sales in the US grew more than 14% between 2010 and 2015 to nearly $103 billion in 2015, according to data from Euromonitor.

Investors have been betting on positive trends to continue in the burger industry, valuing restaurants like Habit Burger and Shake Shack at more than 100 times their earnings per share.

five-guys-burgers-thumbnail-1“The burger business might be the restaurant industry’s toughest market to crack at this point,” writes Jonathan Maze at Nation’s Restaurant News. “It’s certainly tougher than either tacos or pizza, given the presence of so many ‘better burger’ chains like Five Guys , Smashburger, Shake Shack and The Habit Burger Grill.”

Even Chipotle has been considering getting in the burger game. Earlier this year, following the E. coli scare that affected its restaurants in 14 states and sent sales tumbling by as much as 30%, the burrito chaintrademarked the term “Better Burger.

But the burger “bubble” in the US might be about to pop.

Kalinowski expects same-store sales to be relatively flat in the second quarter of the year, and “odds are that meaningful improvement could be hard to come by over the next three to six months,” he wrote.


Five Guys burger. Hollis Johnson

Demand for burgers is shrinking. Wikimedia Commons

For more on this story go to: http://www.businessinsider.com/burger-sales-are-slowing-2016-6?utm_source=feedburner&amp%3Butm_medium=referral&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29


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