America's 'better burger' obsession is fading — and a new kind of fast food is taking over
"Better burger" chains from Smashburger to Five Guys have exploded in recent years, leading to industry heavyweights like McDonald's and Wendy's changing their strategies.
But America's obsession with burgers seems to be fading.
This week, Nation's Restaurant News released a list of the fastest-growing restaurant chains. Burgers were noticeably absent from the top five, which instead included chicken chains Chick-fil-A, Raising Cane's Chicken Fingers, and Wingstop.
It's likely that items like fried chicken sandwiches and buffalo wings are more exciting to American diners than the classic burger-and-fries. Poultry also has a healthier reputation and is less expensive than beef.
While the chicken chains are soaring in sales, burgers seem to have hit a stale point.
After years of soaring demand for 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.
But now, many major players in the burger world are investing in chicken menu items.
McDonald's released a Chick-fil-A copycat sandwich last year.
The fast-food burger chain made over its previous chicken sandwich with a new buttermilk recipe that received positive feedback from critics and consumers.
Shake Shack also released the Chicken Shack, a South-style fried-chicken sandwich topped with pickles.
The chicken trend also bodes well for KFC, which is in the process of improving restaurant operations and marketing.
KFC is reinventing its menu, remodeling restaurants, and retraining employees across the US. Sales are rising, with growth every quarter since the Colonel's return.
Hayley Peterson and Kate Taylor contributed to this story.
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