Chick-fil-A’s profits soar despite pandemic, still-closed dining rooms

Employees direct traffic and take orders outside the Chick-fil-A on Northside Drive in Atlanta on Monday April 19, 2021. Sales for the overall Chick-fil-A chain were up last year, even with the pandemic, compared to the year before, according to company disclosure documents. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

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Employees direct traffic and take orders outside the Chick-fil-A on Northside Drive in Atlanta on Monday April 19, 2021. Sales for the overall Chick-fil-A chain were up last year, even with the pandemic, compared to the year before, according to company disclosure documents. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

The vast majority of Chick-fil-A’s more than 2,000 dining rooms remain closed, as they have for most of the pandemic. And yet sales and profits have soared over the last year at the Atlanta-based chain.

The coronavirus has pulverized the balance sheets of many restaurants. But anyone with a drive-thru had a potential advantage as Americans shifted their eating habits and seating positions.

Sales at Chick-fil-As operated by franchisees totaled $13.7 billion in 2020, up 13% compared to a pandemic-free 2019, according to a franchise disclosure document the company was recently required to file with states.

That helped the brand owner, which operates relatively few of the nearly 2,600 outlets carrying its name. The Atlanta-based parent’s profits rose 26%, to about $843 million, according to the disclosure document.

The country’s largest chicken chain is a rare breed. U.S. sales for the 500 largest restaurant chains sank about 8% last year, a combined $27 billion hit compared to the year earlier, according to industry consultant Technomic. Just 95 of the 500 biggest players registered any sales growth.

Fast-food restaurants fared the best: down about 1% overall. Sales at fine dining outlets plummeted the most: nearly 40%, Technomic reported.

Among the 10 biggest U.S. chains, Domino’s and Chick-fil-A both saw big sales increases, while Subway and Starbucks suffered the sharpest declines.

Chick-fil-A benefited in part from being the biggest player in a hot category: Chicken chains from Popeyes to Raising Cane’s also did well, according to Technomic.

But even Chick-fil-A was plucked some by the pandemic — the gains are a slowdown from its 2019 growth.

While the chain was allowed by many state and local governments to reopen restaurants for eat-in dining months ago, most of its franchisees in Georgia and around the nation didn’t do so. A spokeswoman for the private company said she didn’t have a definitive answer on when more might reopen and declined to comment about how the chain is doing financially.

According to the company’s disclosure document, though, many outlets expanded use of drive-thrus and increased digital and delivery options during the pandemic. Still, within the chain, “some restaurants continue to experience negative impacts to sales.”

caption arrowCaption
Employees direct traffic and take orders outside the Chick-fil-A on Northside Drive in Atlanta on Monday April 19, 2021. Sales for the overall Chick-fil-A chain were up last year, even with the pandemic, compared to the year before, according to company disclosure documents. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

Credit: Steve Schaefer

Employees direct traffic and take orders outside the Chick-fil-A on Northside Drive in Atlanta on Monday April 19, 2021. Sales for the overall Chick-fil-A chain were up last year, even with the pandemic, compared to the year before, according to company disclosure documents. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

Credit: Steve Schaefer

caption arrowCaption
Employees direct traffic and take orders outside the Chick-fil-A on Northside Drive in Atlanta on Monday April 19, 2021. Sales for the overall Chick-fil-A chain were up last year, even with the pandemic, compared to the year before, according to company disclosure documents. STEVE SCHAEFER FOR THE ATLANTA JOURNAL-CONSTITUTION

Credit: Steve Schaefer

Credit: Steve Schaefer

Other metro Atlanta-based restaurant companies have had challenges.

“Like nearly everyone in our industry, 2020 was a very tough year,” texted John Browne, the vice president of The Varsity. “For the year, our revenues dropped significantly.”

The 90-year-old business shuttered all its outlets for weeks early on. It partially reopened them, but only the iconic North Avenue restaurant in Atlanta has its dining room open. The Varsity hopes to reopen others “in time.”

Eating and drinking places saw a big increase in March sales nationally compared to a month earlier, according to the federal government. But they haven’t fully made up for where they were before the pandemic. And many smaller, independent restaurants have closed.

About 4,000 restaurants have closed in Georgia, where sales in the sector dropped billions of dollars last year, according to Karen Bremer, the CEO of the state’s restaurant association.

Waffle House, based in Norcross, did better than its leaders had expected after enduring the early months of the pandemic, said spokesperson Njeri Boss.

The chain has traditionally been all in on sit-down dining, with just one drive-thru among its 1,950 or so locations. But during the pandemic, the chain embraced third-party delivery service. Overall sales have picked up strongly since the latter part of 2020, said Boss, who declined to provide specific financial figures for the privately held company.

Sandy Springs-based Inspire Brands said its results have varied across its big brands, which include Arby’s, Dunkin’ Donuts, Baskin-Robbins, Sonic, Buffalo Wild Wings and Jimmy John’s.

Sonic and Arby’s have had the advantage of directly serving customers in their cars, while Buffalo Wild Wings was hit on two fronts: restrictions on dining rooms and a sharp cutback in sports. Technomic reports that Dunkin’s sales slipped about 5%, while Sonic’s rose 21%.

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