An underdog fast food chain is completely dominating the industry

Arby’s reached 20 consecutive quarters of same-stores sales growth last week — and the sandwich chain is only getting bigger.

In the third quarter of 2015, Arby’s reported 9.6% same-store sales growth in the US, thanks in large part to traffic growth. 

The company is dominating the rest of the industry, outperforming a sample of the larger quick service chains by 7.4%, according to Arby’s.

In the long term, the chain’s growth is even more impressive, with comparable two-year same-stores sales up 20%.

Despite Arby’s success, it keeps a low profile compared with competitors like McDonald’s, Burger King, and Taco Bell.

“The first big uptick from a sales standpoint started with the launch of our brisket in Q3 of 2013… that was where we saw our first double-digit increase in same stores sales. [The brisket] launched us on the higher growth trajectory that we’ve been on ever since,” Arby’s CEO Paul Brown told Business Insider. “That was our first really premium sandwich that was along the lines of our internal vision of ‘deli inspired deliciousness,’ that was really great protein, great quality meats, combinations of sandwiches that you certainly can’t easily make at home.”

According to Brown, the company realised in 2013, that while dialogue about quality ingredients and transparency was increasing, much of the quick-service industry had focused on bread and vegetables.

Two years ago, the chain began developing products and marketing that put protein front and center. Last July, the company launched the “We Have the Meats” campaign, putting this vision quite literally in all-capital letters for consumers to see.

 

As a result, Arby’s is selling more meals than ever before. Half of the sales growth in the third quarter can be attributed to increased traffic, due to returning customers visiting more frequently and rising numbers of new customers, according to Brown.

New customers tend to be younger, as Arby’s increases afternoon sales and utilises nontraditional methods to grow brand visibility. Recent hits include the the brand’s Vegetarian Support Hotline and involvement in a tongue-in-cheek feud with comedian Jon Stewart.

However, other than their age, new and returning customers tend to be similar in most ways — especially in their love for meat. Brown says the two biggest categories the brand attempts to target are the “Fast-Foodies,” who crave innovative, fun dishes, and the “Eating Machines,” who are all about food with strong protein-to-dollar ratios.

Brown is confident that the chain has only just begun bringing in new customers. One major way that the company hopes to attract new consumers: opening locations in areas previously devoid of Arby’s, including urban centres such as Manhattan, where the first ever Arby’s location will open in the first week of December.

Arby’s is on track to open 60 new restaurants this year, compared to 30 last year, and 15 in 2013. The chain has developed a number of new store formats, including smaller format stores intended for urban areas.

“Urban locations have been a little bite of a white space for the brand, and the reason why is… we just didn’t have building formats that worked really well in urban locations,” says Brown. “For a brand our size to not have as wide of a penetration in urban locations —  it’s a real opportunity for us.”

With new store formats and continued product innovation such as the recently released A.1. Special Reserve Steak Sandwich, expect Arby’s to only get hotter in the coming year.

A.1. Special Reserve Steak SandwichArby’sA.1. Special Reserve Steak Sandwich

“We’re obviously turning our attention more towards growth,” says Brown. “We’ve ramped it up dramatically over the last several years, and I think our intent is certainly to ramp it up at an even faster pace going forward.”

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