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In 1921, after World War 1, vehicles became more popular and more affordable for the middle class; therefore, drive-in restaurants were introduced. Founded by Billy Ingram and Walter Anderson, the American Company White Castle, is generally credited with opening the second fast food outlet and first hamburger chain. Walter Anderson had built the first drive-in restaurant in Wichita in 1916, introducing a low cost and high speed hamburger restaurant. White Castle was tremendously successful from the beginning and produced numerous competitors. Then, franchising was introduced by A&W Root Beer, which franchised its distinctive syrup.
Howard Johnson's first franchised the restaurant concept in the mid-1930s, formally standardizing menus, signage and advertising. Moreover, in 2006, the global fast food market grew by 4. 8% and reached a value of 102. 4 billion dollars. Shockingly, in India alone, the fast food industry was growing by 41% a year. Today, the United States has the main fast food industry in the world, having roughly 2 million U. S. workers employed in the areas of food preparation and food servicing.
Leader in the Fast Food Industry: A&W, McDonalds, Subway…? The fast-food industry or quick service restaurants are thriving.
The food industry is let by fast food restaurants which are responsible for 72. 8% of the whole food industry revenues. In North America, McDonald's is followed by Subway, Burger King, Wendy’s, Starbucks, Taco Bell, Dunkin’ Donuts, Pizza Hut, KFC. All in particular order to the amount of sales in North America in 2010. McDonald’s is the industry leader, with revenues that are 3 times to the next on the list.
They are very much concentrated on low prices and getting the customer as quick as possible out the door, which appeals a lot to families that want a cheap, fun and safe place to eat.
In today’s modern society, time is a very essential and limited factor; society is very preoccupied with everything else going on, their eating habits become irrelevant. This is where fast food restaurants such as McDonalds, have a great success preparing their food in record time, making more time for other and more important tasks. Fast Food Trends Over the last decade there has been increased focus on the quality of food served in fast food restaurants. “New” fast food versus old fast food, which essentially means that throughout the past years, many fast food businesses started to develop.
And two “leagues” of fast food restaurants have emerged. “Old” fast foods and “new” fast foods, the old fast foods consist of companies like McDonald’s and smaller companies like Burger King and Yum! Brands (Taco Bell, KFC, Arby’s and Wendy’s). “New” fast foots are “Chipotle Mexican Grill”, “Panera Bread”, “Five Guys” and Oqdoba all owned by “Jack in the box” which is a member of the old fast food league. Both leagues have very similar attributes. They both serve inexpensive food in a casual matter while keeping a fast tempo.
But the players in the “new” league have introduced higher-quality menu items, making the consumer’s experience more similar to a traditional restaurant dining casually at a table, rather than being in and out of the fast food restaurant with a greasy bag of food. Typically highly processed and industrial in preparation, much of the food is high in fat and has been shown to increase body mass index and cause weight gain. Popular books such as Fast Food Nation and documentaries like “Super Size Me” have amplified public awareness of the negative health consequences of fast food.
These documentaries have had a huge impact on fast food restaurants who were indirectly obliged to respond to this trend if they wanted to keep most of their clientele. AMERICAN DIETARY TRENDS, BY DECADE | Historical Events| Food Trends of the Time| 1950–1959| - Mothers returning to the home after the war effort - Postwar baby boom - Construction of the national highway system| - Packaged meals available - First TV dinner (Swanson), 1953 - Rise of hamburger chains along highways; Oscar Mayer "Wiener-Mobile"| 1960–1969| - Growing middle class with money to spend.
- Growing social unrest over the Vietnam War in late 1960s| - Introduction of Julia Child's French cooking - "Hippies" bring back demand for unprocessed, made-from-scratch foods - Vegetarian trend starts| 1970–1979| - End of Vietnam War - Watergate scandal - Growing inflation - Major influx of Asians due to Immigration Act of 1965| - Continued demand for organic and fresh: "California Cuisine" - Elaborate dinner parties with ethnic dishes - Growing appetite for Asian cuisine| 1980–1989| - Stock market plummet of 1987| - "Nouvelle Cuisine" is the thing du jour–diners willing to pay more to eat less - Return to simplicity in late 1980s.
- Exploration of different tastes (e. g. , TexMex, Ethiopian, Southwestern)| 1990–1999| - Introduction of the Internet puts foods at consumers fingertips| - Everything reduced-fat, low-fat, fat-free - Naturally healthy cuisines (Mediterranean) - New movement toward simplicity| Segments in Fast Food Industry When observing the fast food industry, it is obvious that restaurants specialize in certain fat foods. In fact, fast food restaurants can be divided in eight categories: Asian food, burgers, sea food, pizza/pasta, snacks, chicken, Mexican food and sandwiches.
The different segments distinguishes the direct competitors such as McDonalds and Carl's Jr. trying to sell/make the best burgers and the indirect competitors such as Quizno's who specialize in sandwiches and Domino's Pizza who focuses on promoting their delicious pizza but still tries to sell sandwiches. All fast food restaurants fiercely compete with each other to sell not only their speciality but have the most sales in general. In 2010, as being the leader of the fast food industry, McDonald's was and is still at the top of the burger category, with more than $32 billion in system wide sales.
The winners for the other categories were Taco Bell for the Mexican segment, KFC for the chicken category, Pizza Hut for the Pizza and Pasta brands, and Long John Silver's winning the Seafood segment. The graph demonstrates the different segments of the fast food industry as well as the restaurants and their rankings. QSR 50 Rank| Company| Segment| 22| Panda Express| asian| 3| Burger King*2| burger| 23| Carl’s Jr. *| burger| 34| Checkers/Rally’s| burger| 33| Culver’s| burger| 16| Dairy Queen*| burger| 30| Five Guys Burgers & Fries| burger| 19| Hardee’s*| burger|.
45| In-N-Out Burger*| burger| 15| Jack in the Box| burger| 50| Krystal*| burger| 1| McDonald’s| burger| 10| Sonic| burger| 27| Steak N Shake*| burger| 4| Wendy’s*| burger| 25| Whataburger| burger| 40| White Castle*| burger| 31| Bojangles’| chicken| 41| Boston Market*| chicken| 11| Chick-fil-A| chicken| 26| Church’s Chicken| chicken| 38| El Pollo Loco| chicken| 9| KFC| chicken| 20| Popeyes*| chicken| 28| Zaxby’s| chicken| 18| Chipotle| mexican| 36| Del Taco| mexican| 44| Qdoba| mexican| 6| Taco Bell| mexican| 39| CiCi’s Pizza*| pizza/pasta| 12| Domino’s Pizza*| pizza/pasta|.
24| Little Caesars*| pizza/pasta| 35| Papa Murphy’s| pizza/pasta| 17| Papa John’s| pizza/pasta| 8| Pizza Hut| pizza/pasta| 43| Sbarro*| pizza/pasta| 14| Arby’s| sandwich| 48| Einstein Bros. Bagels*| sandwich| 42| Jason’s Deli| sandwich| 29| Jimmy John’s*| sandwich| 13| Panera Bread| sandwich| 21| Quiznos*| sandwich| 2| Subway*| sandwich| 47| Captain D’s| seafood| 32| Long John Silver’s*| seafood| 37| Baskin Robbins*| snack| 49| Cold Stone Creamery| snack| 7| Dunkin' Donuts*| snack| 5| Starbucks*| snack| 46| Tim Hortons1| snack| Own A Fast Food Restaurant: a Bad or Good Idea?
It is not a very good and viable industry for anyone to enter. The global economy shifts have been proven to highly affect certain fast food companies. Fast food companies were once thought to be immune to recessions, because of their low prices and fast service because logically in a recession, consumers have to cut spending. Many consumers “traded down”, from casual restaurants to fast food restaurants because of the cheap BigMacs, Whoppers and $1 value 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. Same-store sales in America at McDonald's, the world's largest fast-food company, did not decline throughout the downturn. Panera Bread, an American fast-food chain known for its fresh ingredients, performed well, too: its boss, Ron Shaich, claims this is because it offers higher-quality food at lower prices than restaurants. Money can be a big problem in terms of starting a business in the fast food industry.
Rising prices have also significantly affected many fast food franchises. With food and beverage inputs making up approximately 33% of costs, higher prices for livestock, corn, wheat and more have seriously shrunk margins over the past decade. In such a fiercely competitive space it is impossible to force a price increase on customers, so profit margins are often south of 10%. The recent economic recession did lower commodity prices, but the recession brought on its own complications, and now prices for commodity inputs are on the rise again. Direct and Indirect Competitors.
Direct competitors in the fast food industry are the companies that produces and sells an almost identical product which they offer for sale within the same market as those produced by one or more other companies. McDonalds and Burger King compete directly with each other, Wendy’s and A&W also compete directly because they have a very similar product and service. If a customer really wants a burger and fries, he or she will not go at the other end of town just to get to their favorite burger place, they will settle for a very similar product within a closer proximity.
Indirect competitors in the fast food industry are the companies or services that are not similar to each other and that share very different characteristics about their product or service. A good example of an indirect competition in the fast food industry could be restaurants such as Swiss Chalet or a sandwich shop and a Panda Express, both are fast food restaurants but they compete indirectly with each other because one customer may want to eat an Asian dish but not wanting to eat a sandwich, this leading to the customer going as far as it takes to go eat an Asian dish.
All in all, fast food is not only about a fast service or eating fattening food , it requires a lot of knowledge and time to make these franchises work and make an ever growing profit. Over the past years and the years to come, McDonalds has and will obviously be the number one leader in the fast food industry because of their extraordinary service, delicious food and their 34,000 restaurants all over the world.
However, as years go by, obesity is becoming a huge problem as thousands of kids and adults are attained of heart problems, therefore, decreasing the amount of clients who eat fast food yearly. Trends are changing and people are starting to eat a lot healthier realising how significant it is to take care of their body. In the next century, will fast food restaurants become a thing of the past or will they find a way to stay their clients number one's solution when it comes to filling up their stomach? Only time will tell...
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