Chick-fil-A is on track to become the third-largest chain in America — and McDonald’s and Wendy’s should be terrified

Chick-fil-A is taking over fast food. Hollis Johnson/Business Insider
  • Chick-fil-A is set to become the third-largest restaurant chain in the United States by sales by the end of 2018, up from the No. 7 spot in 2017.
  • Sales have increased an estimated 12 to 15% – more than $US1 billion – over the last year, according to Kalinowski Equity Research.
  • If it clinches the No. 3 spot, Chick-fil-A will beat out Subway and Taco Bell, lagging behind only Starbucks and McDonald’s.

Chick-fil-A is taking over the fast-food industry.

The chicken chain is set to become the third-largest restaurant by sales in 2018, up from the No. 7 spot in 2017, according to Kalinowski Equity Research.

People have been predicting that Chick-fil-A could snag the No. 3 spot – behind reigning champ McDonald’s and Starbucks – for quite some time. However, initial predictions anticipated Chick-fil-A would take the spot in 2020. In April, analyst Mark Kalinowski updated his forecast, saying Chick-fil-A could take the No. 3 spot by 2019.

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Now, Kalinowski is predicting that Chick-fil-A’s system sales will increase by roughly 12 to 15% in 2018, allowing the chain to snag the bronze medal of the restaurant industry.

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Chick-fil-A. Hollis Johnson/Business Insider

In 2017, Chick-fil-A grew sales by 14.2% – the equivalent of $US1.1 billion – exceeding $US9 billion, Restaurant Business reported. According to the trade publication, which cited Technomic data, sales were up 15.5% in 2018 as of July.

Because Chick-fil-A is a private company, it is difficult to calculate the company’s exact sales. But if Technomic is correct, that would mean Chick-fil-A is growing significantly faster than any other chain. The nearest competitor would be Domino’s, which grew system sales by roughly 12% in 2018.

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Chick-fil-A’s famous chicken sandwich. Hollis Johnson/Business Insider

“We have long pointed out that Chick-fil-A is the restaurant competitor with which McDonald’s … should most concern itself – and by extension, investors should, too,” Kalinowski wrote.

Kalinowski also said Chick-fil-A’s growing dominance should scare Wendy’s, which has been historically celebrated for serving a fried-chicken sandwich that is superior to fast-food rivals. With Chick-fil-A’s expansion, it is easier for customers to find the fried-chicken sandwich that – in Chick-fil-A’s words – invented the entire category.

Subway is the third-largest restaurant chain in the US by sales. Taco Bell is in the No. 4 spot, Burger King is No. 5, and Wendy’s is No. 6.