Magazine article Marketing

Takeaway Success

Magazine article Marketing

Takeaway Success

Article excerpt

Fast-food outlets have performed well during the recession because consumers view their offering as an 'affordable treat', writes Jane Bainbridge.

In Japan they are a safe place for teenage girls to hang out, in Mexico families flock to them as a mealtime treat and in the UK they remain loved and loathed in almost equal measure. Although McDonald's restaurants have undergone a facelift in the past few years and the menus have been updated, they still divide opinion.

However McDonald's has shored up its position as the leading burger-bar chain, its sales have increased and its expansion plans in Europe continue, as it appears to have shaken off the Supersize Me public relations disaster. Its 'Big nothing' campaign last year promoted the quality of its ingredients and that its burgers are 100% beef.

In general, fast-food brands have performed well during this recession as they tick the 'convenience' and 'low price' boxes. Although research by GMI shows that consumers are cutting back on leisure activities, dining out and going out remain their top spending priorities after paying their bills.

In 2009, Mintel estimates the UK eating-out market was worth pounds 31.3bn. The fast-food sector, which includes burgers, chicken, pizza, and fish and chips, was worth pounds 8.2bn in 2008 - a 16% increase since 2004. Fried chicken grew the most, with sales rising by almost 28% in the four-year period to be worth pounds 1.2bn in 2008. This compares with an increase in burger sales of almost 15% to pounds 2.5bn in the same period. The combined chicken and burger market was worth pounds 3.7bn in 2009.

The recession and associated brand activity have changed purchasing habits so that discounting and value for money have become more important for consumers. Even as the recession eases, it is likely some of the changes in behaviour will endure and the chains will have to justify the cost of their meals. However, these attitudes have helped fast food, as it continues to be viewed as an 'affordable treat', while the higher-end eating out market has taken more of a hit.

In general, the eating-out market has been better placed to weather this recession than in the 90s, as restaurants have extended their meals to include breakfast and all-day snacks. Yet, this also means the chicken and burger bars face greater competition from rivals such as pubs, which have extended their food menus, often offering value meals including burgers, and opening for breakfast.

The establishment of a fast-casual dining sector, as championed by chains such as Portuguese-themed Nando's and noodle bar Wagamama, is another potential competitor. These offer a slightly more upmarket and quality dining experience but are still affordable for families and young adults.

British consumers are keen snackers and this trend has been identified and exploited by some of the brands in this market. For example KFC offers pounds 1.99 snack boxes and Subway has a Value Snack Menu starting from 89p, which includes bread-free options such as salad and nachos.

Moves toward healthy eating continue to gain momentum and by the end of 2008 McDonald's, Burger King, KFC, Nando's, Subway and Wimpy had all signed up to the Food Standard Agency's Healthy Food Code of Good Practice, which requires them to improve the nutritional content of their food and reduce the levels of salt and fat it contains. …

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