Good and Hungry
Fast-food firms have to be a thick-skinned bunch. Health experts regularly lambast them for pedding food that makes people fat. Critics even complain that McDonald’s, whose golden arches symbolize calorie excess, should not have been allowed to sponsor the World Cup. These are things fast-food firms have learnt to cope with and to deflect. The burger business faces more pressure from regulators at a time when it is already adapting strategies in response to shifts in the global economy.
Fast food was once thought to be recession-proof. When consumers need to cut spending, cheap meals like Big Macs and Whoppers become even more attractive. Such “trading down” proved true for much of the latest recession, when fast-food companies picked up customers who could no longer afford to eat at casual restaurants. Traffic was boosted in America, the home of fast food, with discounts and promotions, such as $1 menus and cheap combination meals.
As a result, fast-food chains have weathered the recession better than their pricier competitors. In 2009 sales at full-service restaurants in America fell by more than 6%, but total sales remained about the same at fast-food chains. In some markets, such as Japan, France and Britain, total spending on fast food increased. Some-store sales in America at McDonald’s, the world largest fast-food company, did not decline throughout the downturn. Panera Bread, an America fast food chain known for its fresh ingredients, perform well, too: its boss, Ron Shaich, claims this is because it offers higher quality food at lower price than restaurants.
But not all fast-food company have been as fortunate. Many, such as Burger King, have seen sales fail. In a sever recession, while some people trade down to fast food, many others eats at home more frequently to save money. David Palmer, an analyst at UBS, a bank, says smaller fast-food chains in America, such as Jack in the Box and Carl’s Jr, have been hit particularly hard in...