Last year, sales at full-service restaurants fell by 6%, but sales among fast-food companies remained relatively stable. Though fast-food companies are berated by critics as peddlers of fat and unnecessary calories, they have deflected criticisms and remained afloat in rough economic waters. In a June article from The Economist, we learn that fast food’s success is predicated on their ability to respond to changes in the global economy, making them seemingly recession-proof.
In 2009, many consumers were opting for dollar menus over full-service restaurants, overlooking nutrition and quality for value. But as we see economic improvement, consumers have the luxury of once again being spendthrifts. Brand loyalty and customer retention are valuable to the hospitality industry, and this is no different for fast food. Analysts expect the fast-food industry to grow modestly in 2010, and companies are now rolling out higher-priced fare for a customer base that only a year ago had to be frugal. KFC has introduced a $5 sandwich and Burger King has launched pork ribs for $7. One year ago, these items would have been unthinkable.
Generating customer traffic can be attained through greater menu variety. With new confidence in customers, companies are trying to get them to buy more. McDonald’s “McCafe” line sells premium coffee as a challenge to Starbucks. Their sales are now estimated at 6% of McDonald’s sales in the US. Adopting the idea that it is unwise to appeal only to the customer who wants fries, healthier options like salads and low-calorie sandwiches are seeking to diversify a restaurant’s appeal. Promoting breakfast foods is also lucrative, as these items have high margins. In addition, midday and late-night snacks add to this variety, as these are things consumers want all day.
Growth for fast-food companies in the US, however, is limited, as many see the American market as being saturated. While fast-food companies now look to Asia and Europe, full-service restaurants here in the US can look to the strategies of fast-food companies as templates for generating more customer traffic. An improving economy leaves all restaurants rife for innovation. Fast-food companies, for better or worse, are American icons, and their approach to customer retention and loyalty are not to be overlooked. McDonald’s success is not just a canary in a coal mine but is also a rainbow after the storm.