What Are You Eating for Lunch Today?

Jennifer Nietz - Manager of Operations


July 2014 – If you are like 50% of Americans out there you are probably planning on heading out of the office to get a quick bite at your local fast food chain.  Why?  Because it’s fast and cheap, and quite frankly taste good.

This month I have chosen to report out on the fast food industry as we are currently working with several clients that provide products and services in this space.  The good news is this industry is going to continue to grow!  IBISWorld’s recent report, published in March, is projecting the next 5 years at annual 2.0% growth.  The growth in revenue is expected to increase in parallel with the increase in consumer spending over the next 5 years; consumer spending is a key driver in this industry. The industry has a couple of key players that you may be familiar with: McDonald’s, Subway, Wendy’s Corporation, and Yum! Brands.  Yum! Brands includes Pizza Hut, KFC, Taco Bell, and WingStreet.

When taking a look at the above graph you will see that the industry is in what we call a traditional service economy. They are labor intensive as opposed to capital intensive. The key to success in this type of environment is to emphasize new technology to help become more efficient so if there is a drop in labor you are able to succeed or implement new training to increase revenue growth of your teams.

Through our work at COACT we are seeing that this industry is trying to find ways to do more with less.  We are seeing an increase in mobility adoption to help speed up the process for both employee and customer. I have also seen new systems being implemented that can be monitored at a corporate level, as opposed to site-by-site, so that the corporate or home office has control over the store or franchise; thus controlling the cost internally.

We are also seeing consumer preferences driving the restaurants to change the way they are thinking about their offerings.  As an example, consumers have become increasingly health conscious and major fast food retailers have responded by expanding the number of healthy options on their menus. For many fast food chains, this factor has become a cornerstone of their marketing strategy, enabling them to target a new segment of the market and also renewing interest in their products. Subway, for example, was one of the first restaurants to capitalize on the health and weight concerns of consumers and successfully market the health benefits of its sandwiches.

Having trouble breaking into this market?  Not a surprise- it’s important to know when corporate makes decision and when franchisees make the decisions.   Some franchisees can own over 100+ facilities and have a lot of decision making power.  It often times depends on the product or service you are selling into this market, on where the decision is made.  Knowing where to go to help find this information and building a great prospect base is critical to your success in this industry.

Questions or comments? Please contact Jennifer Nietz at jnietz@teamCOACT.com.