Fast Food Tries to Recapture Consumers
May 10 -- As the tastes of hungry, harried consumers evolve, fast food restaurants themselves are busy concocting recipes to stave off slow sales growth.
The challenges of luring a customer who is both more health conscious and time crunched than ever before has come to the forefront with the pending sale of Burger King by its parent company, the U.K.-based spirits maker Diageo.
Burger King, along with McDonald's, has been suffering from lackluster sales growth in recent years as alternatives like sandwich shop Subway and fast casual restaurant restaurants like Chili's, owned by Brinker International, and the Olive Garden and Red Lobster, both owned by Darden Restaurants, have prospered.
McDonald's, still by far the dominant player with over 30,000 restaurants worldwide and 43.1 percent share of the U.S. fast food market, nonetheless had sales growth of only two percent last year, primarily due to expansion. Burger King, whose parent company does not release its financial data, saw sales of $8.6 billion last year, only one percent higher than $8.5 billion the previous year, according to Chicago-based food service consulting firm Technomic.
At the same time, competitors Subway and Wendy's have fared better. Subway's same-store sales posted a 13 percent gain last year, with overall sales reaching $5.2 billion, up 30 percent from 2000. Wendy's, which launched a new line of Garden Sensations salads in February, saw same-store sales rise 5.6 percent in the first quarter, an improvement from the two percent rise posted for all of 2001.
Changing Tastes
To some extent, the sluggish sales of fast food restaurants can be attributed to the economic downturn.
One indicator reflecting that is the increase in consumers preparing home-cooked meals. That number jumped to 85 percent last year from 74 percent in 2001, according to the Food Marketing Institute. The institute found that people eating in fast food restaurants once or more a week fell to 32 percent from 38 percent.
Related Stories
ABC News Live