Surge in Sales for Orange County’s Restaurant Chains Amidst Employment Decline

Outdoor dining in Orange County, reflecting the thriving restaurant culture.

News Summary

Orange County’s largest restaurant chains reported an 8.5% increase in systemwide sales, totaling $37 billion. However, local employment within these chains fell by 6.4%, dropping to 20,900 employees. Despite this trend, many establishments, including Kura Sushi and Nékter Juice Bar, plan aggressive expansions. Kura Sushi alone reported a 27% sales increase, while Nékter aims to double its locations over five years through new business models.

Orange County

Orange County’s largest restaurant chains reported a significant surge in systemwide sales, reaching $37 billion for the year 2024, marking an 8.5% increase compared to the previous year. However, this growth in revenue came alongside a 6.4% decline in local employment, with total headcounts for these chains dropping to 20,900 employees.

Notably, despite the decrease in employment numbers, many Orange County-based restaurant companies have bold plans for expansion in the coming years, signaling a robust optimism in the local restaurant sector. Highly ranked restaurants within the area are expected to contribute to continued growth through new store openings and innovative business strategies.

A standout performer, Kura Sushi USA Inc., based in Irvine, achieved a remarkable 27% increase in systemwide sales, which totaled $238 million. This growth allowed Kura Sushi to ascend to the 13th position among the largest restaurant chains in the region, climbing by two spots from last year. The company’s Chief Development Officer highlighted that much of Kura’s growth is attributed to new restaurant openings, with an annual increase in restaurant count averaging 23% over the past five years. In 2024 alone, Kura Sushi opened 13 new locations and anticipates at least 20% growth in restaurant count in the next few years. Wall Street has reacted favorably, culminating in a market capitalization of $811 million for Kura Sushi (Nasdaq: KRUS).

Nékter Juice Bar Inc., located in Costa Mesa, also reported significant success with a 33% increase in sales, bringing their total to $162 million and securing the 18th position among the largest chains. The company is planning to expand by introducing new delivery-only store models in collaboration with DoorDash, with goals to grow from 222 units to 500 locations over the next five years.

Other prominent chains such as Taco Bell and Chipotle Mexican Grill are also experiencing remarkable growth by focusing on international expansion and restaurant innovation, contributing to the overall surge in sales. In-N-Out Burger, ranked third, reported a 12% increase in sales totaling $2.4 billion, and witnessed a 5% increase in its local employee count, now reaching 3,816. However, plans are underway for In-N-Out Burger to relocate its headquarters from Irvine to Baldwin Park by 2029, which could potentially impact local employment rates.

In contrast, Del Taco, owned by Jack in the Box, is facing challenges as the chain recorded a 1.6% decline in sales, totaling $959 million. The company is reportedly exploring strategic alternatives to improve its performance. El Pollo Loco, ranked fifth, has received a buy offer from major stakeholder Biglari Capital Corp. to acquire remaining shares, indicating potential changes in ownership dynamics.

Additional growth was seen with Panini Kabob Grill, which experienced a 14% increase in sales to $183 million and a local employee growth of 17%, reaching 473 employees. Conversely, Wienerschnitzel faced a challenging year with sales falling by 16% to $355 million, while California Pizza Kitchen encountered a 10% decline in sales, totaling $406 million, and is now planning for U.S. franchising efforts. Wahoo’s Fish Taco showed resilience with a slight sales growth of nearly 2% to $59.2 million, recovering from setbacks encountered during the pandemic.

In summary, while Orange County’s largest restaurant chains are enjoying significant sales growth, the decline in local employment highlights a complex landscape for the restaurant industry. With several chains planning expansions and innovative strategies, the future remains cautiously optimistic for the sector.