Kc Chohan’s Post

GapMaps’ Annual Australian Fast Food and QSR report is here, offering valuable insights on store openings and closures we've observed in the Fast Food & QSR sector. In 2023, Australians continued to dine out and takeaway, the food and beverage industry saw total sales increase by over 10%*, (4.2% adjusted for inflation). The 31 major chains tracked opened 227 new outlets, with the eight fastest-growing brands adding 184 locations. Close to 52% of all Australians can access 10 or more QSR brands within 3km of home. GapMaps maps this variation in brand access across major capital cities. GapMaps has partnered with CommBank IQ to provide insight on the real spending habits of consumers at a local level, including on food delivery spending. You can download the full report here 👉 [https://lnkd.in/gtQAunMt] Further in-depth analysis can be undertaken within the GapMaps Live platform. *as measured by the ABS retail sales series on Cafes’, restaurants and takeaway food services for the 12 months to December 2023.

The Fast Food and QSR sector continues to see strong growth with 226 new outlets opened in 2023. More than 50% of Australians can access 10 or more QSR brands within 3km of their home. With so much choice it is not surprising that total sales increased by over 10%.

$18 for a Big Mac Meal – I am not sure Grimace could even afford that   That is the reality at select McDonald’s locations in the Northeast, and consumers are not happy about it. The average price of a Big Mac in the U.S. was $4.39 in 2019.   So what can these companies do about it? Are value meals the secret weapon to win back customers in a time of rising prices?   With the rise of inflation, fast food prices are up 4.8% (officially) from last year. Fast food giants such as SONIC Drive-In, McDonald's, Taco Bell, and more have recently focused their strategy on affordability for consumers by rolling out value meals, hoping to entice customers back into their restaurants. In a recent conversation with The Food Institute, I discussed how these promotions might initially draw in customers, however, it's important to recognize that they may not foster long-term loyalty. I also noted, "In an environment where almost all fast-food chains are launching new value menus, these ‘loss leader’ offerings seem unlikely to drive additional market share."   Read the full article here: https://lnkd.in/gfCkZQxU   #FastFood #QSR #ValueMeals #CustomerLoyalty #RestaurantStrategy #ConsumerBehavior #FoodIndustry

Fast food joints were once the go-to option for quick, cost-friendly meals, but now, they’re starting to pinch the budget. Inflation has hit fast food chains hard in the past decade, with many restaurants seeing an average price increase on menu items of more than 50%. This graphic visualizes the average price increase of 10 core menu items from select American fast food chains, as well as the change in the consumer price index (U.S. city average) for food away from home, from 2014 to 2024. Fast food chain data comes from Finance Buzz and the food away from home figure comes from the Federal Reserve’s March 2024 Consumer Price Index data...

The #foodservice terrain has shifted in these changing times -- from the pandemic, to recovery, to economic shifts. Consumers have altered their spending and their lifestyles, and #foodservice continues to adapt. This article from NACS Magazine highlights a few of the ways consumers have changed their dining habits across segments: 🍔 Fewer restaurant visits, 🍔 Shifts from full-service channels to QSR and c-stores, 🍔 Choosing lower-cost dayparts like breakfast and afternoon snacks over lunch and dinner, 🍔 Splurging on fewer extras like apps and desserts, 🍔 Selecting the lower-cost option, like the regular sandwich instead of the deluxe, or the medium-size rather than super-sized version, 🍔 Even smaller versions, like adults order the child or mini-sizes, so that portion control and price control converge. Read the full article for more fascinating details -- https://bit.ly/4cZgm5s Then call ESA - Elohi Strategic Advisors for expert guidance in the complicated foodservice channel and these complicated times. ➕ Follow ESA - Elohi Strategic Advisors to keep up with the latest. 🔔 Get notified when we post about #QSR, #CStore, #inflation and how they impact the #foodservice space 💻 Get more info: https://bit.ly/4cVUAzs

I just figured out why so many people talk about the increasing cost of living....(I rarely eat out). According to a recent report by Visual Capitalist, inflation has been hitting hard on our favorite fast-food chains over the past decade. Here are some key findings: - The average cost of dining at these restaurants has increased by 63% since 2014 📈 - McDonald’s leads with prices doubling since 2014 💰🍟 - Subway and Starbucks were the only chains with average price increases lower than overall food away-from-home inflation. As costs continue to rise, we're all feeling the pinch. Even quick and affordable meals are becoming less so. #Inflation #FastFood #Economy

Fast Food: The New Luxury? A recent LendingTree survey of 2,025 Americans aged 18 to 78 reveals that 78% now view fast food as a luxury items due to pricing increases. Additionally, 65% of respondents reported being "shocked" by a recent high bill. While data suggests that perceived value includes more than just price, this feedback underscores the importance of understanding restaurant segments and customer preferences. For QSRs, the top three customer incentives have traditionally been: 1. Convenience 2. Speed 3. Affordability With recent price increases, fast food is edging closer to traditional restaurant costs. Combined with the rise of digital ordering, the impact of convenience and speed has lessened, causing consumers to reconsider their fast food choices. McDonald's USA President Joe Erlinger acknowledged the pricing issue, stating that the company will be focusing on finding solutions in the coming months. Let us know how you've felt about recent fast food pricing and what strategies should restaurants adopt to address consumer price fatigue? If you'd like to read the full articles 👇 Food & Wine on fast food pricing: https://lnkd.in/gd3BHDJc Restaurant Business Online on McDonald's : https://lnkd.in/gQ2DDzkT?

As I posted on yesterday, the global giant fast food chain McDonald's reported that for the first time since 2020, their global sales fell last quarter. This is further evidence that consumers are cutting back and more are retrenching. As was reported in the Financial Times and elsewhere © Financial Times, 2024. All Rights Reserved. part of the reason behind this drop was that the "price of a restaurant meal has escalated in recent years, with a US index of food consumed away from home up by 30% from mid-2019." This got me to thinking about if this was really one of the root causes of the decline so I decided to do some research. As I learned on © Visual Capitalist, 2024. All Rights Reserved, used with permission, indeed this is true. The infographic below depicts the price increase of 10 McDonald’s menu items from 2014 to 2024. Data comes from Finance Buzz and was updated as of May 2024. McDonalds is by far the industry leader in fast food, and they've also led the way in terms of menu price increases this past decade. Among the restaurants Finance Buzz measured inflation for, McDonald's was the top of the list with a 100% average price increase across 10 different menu items since 2014. Four of their menu items have more than doubled in price since 2014, including their McDouble burger, medium fries, and Quarter Pounder with Cheese meal, which used to cost $5.39 and will now run customers back almost $12. The McChicken sandwich saw the greatest price increase, almost tripling in price from $1.00 in 2014 to $2.99 in 2024. So perhaps a classic case of the victim of their own success?

Is inflation hitting fast food harder? At my daughter's request, we visited Taco Bell last week. The total bill for three of us, including a petite 13 year old girl and my petite wife, was $43. Full disclosure, the petiteness of my wife and daughter may have been at least partially cancelled out by my unpetiteness. Later in the week, we invited several family members to dinner at Texas Roadhouse and the bill was $185, including the tip, for 8 people. So, the Taco Bell dinner cost $14.33/person and the Texas Roadhouse dinner cost $23.13/person. I couldn't escape the feeling that I got a lot more value out of the more expensive meal. If I had to put a number to it, I feel like I got at least 80% more value for 60% more cost. At Texas Roadhouse we got a decent steak, good service, free rolls and a few people even indulged in margaritas (or maybe one person indulged in a few margaritas...who can remember?). At Taco Bell, we got a drive thru person that got our order wrong and barely acknowledged our existence at the window and, well...Taco Bell food. So, is input and labor inflation impacting fast food restaurants more than higher tier restaurants or is it just my perception? It turns out that it's not just perception. Data from last year reported by Restaurant Business Magazine (link in comments), showed that prices at fast food restaurants had increased 6.2% for the year, while prices at full service restaurants increased by 4.3%. Both were higher than overall inflation, which ran about 3.2% for the same time period, but obviously the increases are hitting fast food restaurants harder. There are plenty of reasons this may be true, but the underlying issue is margins. Lower tier restaurants work on tighter margins and have less flexibility when input costs increase. They are forced to pass along these increased costs to consumers because there is less space to absorb costs elsewhere and fewer options for reducing portion sizes or adjusting menus. If the increased costs lead to fewer customers, the problem is exacerbated as relatively fixed overhead has to be spread over fewer customers. Higher tier restaurants have higher margins and more flexibility in this regard and managers have more tools for softening the blow for consumers. Higher tier restaurants also have the added benefit of consumers with less price sensitivity overall (they're less likely to notice and less likely to care than patrons of lower tier restaurants). As inflation, and food inflation in particular, continues to be stubbornly high, this could mean a shift in consumer patterns away from fast food and towards higher end restaurants or even a shift towards less food consumed away from home. At my house, we've decided that we'd much rather have a nicer meal less often than a cheaper meal more often especially with the current value spread. We intend to increase our visits to mid tier and higher end restaurants and dramatically decrease our fast food visits.

The rise of the fakeaway: The popularity of restaurants’ fakeaway options such as Franco Manca pizzas, Gourmet Burger Kitchen burgers and itsu meals has soared over the past year, according to online supermarket Ocado Retail. Ocado reports over 50% growth in sales for brands like itsu and Franco Manca. Products from popular restaurants or fast food brands are increasingly common in most major supermarkets. The rise of the fakeaways trend is largely a result of the cost-of-living crisis, which led many consumers to seek out more budget-friendly ways to enjoy a treat at home,” says Chitnis. The research found that three-quarters (75%) of Brits were now more conscious of spending on takeaways and meals than last year. This changing consumer habit is reflected in Ocado Retail delivery data, which suggests customers seek restaurant standards at home, particularly on weekends. Demand for these products peaks at times when shoppers would have traditionally gone for a restaurant meal out or ordered a takeaway.