Fast food might be a global industry, but it is a dominating part of the American eating habit. Americans are working longer, spending less time at home, and not wanting to cook when they get home. This is leading to strong fast food sales and larger waistlines.
The caloric intake of Americans is similar to that of Austrians. The US has a 31% obesity rate. Austria’s obesity rate is just 9%.
Fast Food Sales
In the United States alone, the fast food industry generated $191 billion in sales in 2013. By 2018, that figure is expected to top the $210 billion mark. Out of those sales figures, the rule that as McDonald’s goes, so does the industry is pretty accurate. With $60 billion in sales, McDonald’s brings in about 1 in every $3 dollars that gets spent.
- 83% of US families will have at least one meal from a fast food restaurant once per week.
- 94% of customers say that the experience they receive at the fast food restaurant, along with the price of food, are what keep bring them back.
- There are over 160,000 fast food restaurants in the United States alone, down more than 70,000 locations from 2013 numbers.
- The average annual wage in the US fast food restaurant industry: $12,800. The average amount of revenues that each employee makes for the fast food industry: $52,000.
- $43 billion worth of wages are contributed to the US economy through sales at fast food restaurants.
- Sales at restaurants open for at least 13 months slipped 0.2% last year in the U.S. at McDonald’s and 0.9% at Burger King for the U.S. and Canada.
- Sales at the major fast-food chains grew only 1.1% in 2013, compared with 4% in 2012.
- Some smaller competitors are doing strong business. Chick-Fil-A locations see an average of $3.16 million in sales every year.
- Each person in the United States consumes an average of 7.64 lbs. of quick-serve restaurant beef every year.
- In 2010, an average fast-food restaurant location collected $753,000 in sales.
- 50 million Americans are served fast food every day, accounting for 37% of that person’s total calories for the day in one serving.
- 79% of Americans who visited McDonald’s in the last year.
- 92% if Americans are familiar with McDonald’s.
Why is the fast food industry shifting gears? It is because people are wanting to have better foods and they’re willing to pay a little more to get those foods. Fast casual dining is exploding and that’s the model the fast food industry needs to follow. Traditional giants like McDonald’s and Burger King are being displaced by chains like Wendy’s and Chick-Fil-A because the latter took an early gamble and remodeled their style to replicate fast casual. Instead of changing the experience, McDonald’s changed their menu instead and it backfired. They still haven’t recovered from it.
How Are Fast Food Companies Reacting?
- To counter weak sales, Wendy’s sold off 400 company-owned units in 2013 to franchisees.
- Other companies have done the same: Yum! Brands sold off more than 680 company-owned restaurants in 2012-2013. McDonald’s has gotten rid of over 200 locations.
- Burger King owns less than 1% of its total locations in the United States.
- Last year, McDonald’s got about two-thirds of its revenue outside the US. 50% of Yum! Brands sales comes from China.
- Despite trying to add healthy options to the menu, salads and similar items account for as little as 2% of total sales in the industry.
- In 2012 those with annual household incomes of less than $70,000 spent an average $1,718 a year on food away from home.
- Encouraging repetitive customers also helps. 6% of the American population will eat at a fast food restaurant 7x per week or more.
The problem that the fast food industry faces is the same problem the American Middle Class faces: stagnant wages. The fast food sales are dependent on lower incomes because that’s who typically sees value in a lower cost, fast meal. In the last 10 years, the Middle Class has dropped out of home spending on food by nearly 3%. Why? Because they have to save money because households in the under $75k bracket have less value to their income than their parents did 30 years ago. Upper incomes choose fast casual instead of fast food because it’s healthier, tastes better, and there is less of a worry about the price point of menu items.