Move over, Big Macs and Whoppers. Regional burger chains like In-N-Out, Whataburger and Culver’s are seizing market share from national fast-food giants, according to industry data, as consumers increasingly gravitate toward quality and service over discount-driven deals.
The $113 billion U.S. fast-food burger sector saw overall sales growth of only 1.5% last year, the slowest among most restaurant categories tracked by Technomic, according to a report from The Wall Street Journal. But regional chains have bucked the trend. California-based In-N-Out posted domestic sales growth of around 10% last year, second only to Shake Shack among U.S. burger chains. Culver’s and Whataburger now rank as the fifth- and sixth-largest U.S. burger chains by sales, respectively, according to Technomic.
Executives at the regional chains said their focus on quality, menu variety and personalized service has built a loyal customer base that does not require heavy discounting to keep traffic strong.
“The differentiator is the service,” said Julie Fussner, CEO of Wisconsin-based Culver’s, which operates 1,066 locations across 26 states. “It’s the breadth of the menu and the quality of our food.”
Fussner said Culver’s traffic is up 5% this year compared with last year. The chain, known for its ButterBurgers and frozen custard, previously offered more discounts but found them becoming less effective as customers grew conditioned to them, she added.
Texas-based Whataburger, founded in 1950 by Harmon Dobson, now generates more than $4 billion in annual U.S. sales across 17 states. CEO Debbie Stroud said the chain is growing at roughly six times the rate it averaged before 2019 and is on track to open about 60 restaurants this year. She credited a “cultlike following” built through quality and customization.
“Our customers understand that they can add grilled jalapeños or swap out grilled onions for our freshly cut tomatoes,” Stroud said earlier this month at The Wall Street Journal Global Food Forum. “There is a craveability that I think has created this loyalty over so many decades.”
National chains are taking notice. Burger King overhauled its Whopper this year and plans more menu improvements based on customer feedback. McDonald’s launched upgraded burgers in 2023 and pledged this month to further improve its food, including cooking fresh beef in more markets. The company also said it wants to improve service and make restaurants more inviting, including by helping customers with kiosks and bringing back play spaces.
“The value component in the better burger sector is the number one thing these brands think about,” said Scott Redler, co-founder of Kansas-based Freddy’s Frozen Custard and Steakburgers, now the 13th biggest burger chain by U.S. sales. “Price is far down the list.”
Many regional chains remain privately owned, often with founding families still involved. In-N-Out, which has fans camp out in parking lots to attend grand openings, has added only four states in the last decade. The company, led by third-generation president Lynsi Snyder, decided to slow its growth in 2010 to ensure food and service quality and to have enough managers meeting its standards, said Chief Operating Officer Denny Warnick.
“An overemphasis on growth would compromise our performance,” Warnick said.
Whataburger’s Stroud said “healthy growth” takes into account density of locations, pace of openings and ensuring restaurant economics are sound. “To do that and do that well, you really have to have an equation of a lot of different factors,” she said.
Customer loyalty was reflected in interviews. Steve Hanshaw, a 59-year-old retired chemical manufacturing executive from The Woodlands, Texas, said he frequents Whataburger and Tennessee-based chain Pal’s when he is in the Southeast. “I’d much rather pay $15 for a good burger than to get a great deal,” he said.
Arley Harriman, a retired advertising executive living in Delavan, Wisconsin, said she loves Culver’s service and cleanliness, plus the quality of its cod sandwiches and custard ice cream. She said a Wisconsin friend who moved to Arizona continues eating at Culver’s there. “Culver’s restaurants are always busy,” Harriman said.