Five Guys, In-N-Out, Shake Shack Or Whataburger: Who's Winning The Burger Wars?
If your workplace is anything like Bisnow, debating what restaurant makes the best burger in the country is a regular pastime. New information from 1010Data may help finally settle the debate. Traditionally, fast food chains have dominated the burger industry, but cultural shifts have fast-casual chains expanding nationwide. All of the chains included in this analysis have a hybrid model, somewhere between fast food drive-thru and full-service restaurant experience. With Q1 2017 data from BurgerFi, Five Guys, Habit Burger, In-N-Out, Shake Shack, Smashburger and Whataburger, a clearer picture of the burger wars takes shape.
In terms of market share, Whataburger is top dog, with 42% of all transactions. In-N-Out is a distant second at 26%, followed by Five Guys at 12%. Market share is not driven purely by number of stores — while Whataburger leads in share of transactions, it is only the second-largest chain in terms of the number of locations. Despite having the fewest locations (only 62), Shake Shack outpaced major players like Smashburger, which has nearly five times as many locations (346).
Growth measurements tell a different story. Between Q1 2016 and Q1 2017, Shake Shack saw a 33% growth in sales. The New York-born chain nearly doubled the number of locations across the U.S. throughout 2016 and early 2017, which contributed to overall growth. Habit Burger, which grew 21%, also had several new openings during this time. Whataburger, BurgerFi and In-N-Out all experienced some growth in Q1, but had little to no store expansion. Five Guys has declined the most in this space, partially due to store closures, but also due to fewer sales at existing locations.
Average Order Size
Average order sizes across the fast-casual burger chains range from $12 to $22. Whataburger and In-N-Out are on the lower end of the spectrum, since their regular hamburgers cost about $2 to $3. Both of these chains have been around for more than half a century and offer fast food prices for their burgers. A hamburger at a newer fast-casual burger joint costs closer to $6 to $8. BurgerFi and Shake Shack, which both offer hot dogs and are also known for their shakes, have the highest order sizes.
Whataburger customers frequent the burger chain about twice as often as all other fast-casual burger joints. The average customer made four purchases at Whataburger in Q1 '17. Whataburger has the advantage of having over 800 locations in the country. Meanwhile, Five Guys has over 1,300 locations but an average trip frequency of 1.6, which is in line with chains that have a much smaller footprint. The smaller trip frequency is likely contributing to Five Guys’ sales decline. On average, In-N-Out and Habit Burger customers are eating at these chains every six weeks.
Churn is another measure that helps retailers understand how frequently their customers are making purchases. Whataburger was once again on top. Three-quarters of Whataburger customers made a second purchase within 90 days of their previous purchase. Only one-third of Shake Shack and BurgerFi customers made more than one purchase within 90 days, less surprising since they have fewer locations.