Dive Brief:
- TD Cowen predicts Cava could reach 1,200 units by 2033 as the fast casual brand dominates the underrepresented Mediterranean foods segment, according to an analyst report emailed to Restaurant Dive.
- The investment group believes Cava is well-positioned to outperform the restaurant industry in 2025, but macroeconomic conditions are a potential drag on performance.
- TD Cowen forecasts Cava’s same-store sales will rise between 6% and 8.8% this year, but said there is also a plausible path to 10% same-store sales growth for 2025, at a time when many brands are seeing flat same-store sales growth.
Dive Insight:
Key to Cava’s strength, the report said, is the chain’s dominance of its market segment. The brand is roughly four times the size of its nearest competitor in the Mediterranean fast casual sector, per TD Cowen.
The report said that since December 2023, Cava has opened 58 net new restaurants. By contrast, its 15 largest direct competitors combined have opened a net of five new units. This means Cava has taken considerable share in terms of open units relative to other segment leaders. And with only one competitor, Taziki’s, operating over 100 units by TD Cowen’s estimate, Cava has considerable opportunity to consolidate its position and continue to grow.
How Cava’s store count compares to its closest segment competitor
“CAVA fits our criteria as a category leader with a digital advantage that is key to our thesis on restaurant industry outperformers,” the report found.
The brand came off a strong 2024 with a strategy focused on emerging and growth markets, and it is still entering new markets this year. In March, Cava opened its first store in Indiana ahead of further expansion in the Midwest, and in April it opened its first South Florida location.
Meanwhile, Cava’s success at existing units has been driven by restrained pricing. A new loyalty program, which debuted nationally in October, could also help sustain momentum. The chain is investing in its in-store experience as well, part of a shift among brands to prioritize in-person service after years of emphasizing digital ordering.
The Mediterranean segment is well-situated to take advantage of shifts in consumer taste and “inspires health & wellness, while the concept eliminates the veto vote with the ability to eat indulgently,” according to the report.
