30th Jan 12
Fast food outlets prosper consumers go for treats
by Adam Richards
Unhealthy obession: more fast food restaurants prosper in recession
Unhealthy obession: more fast food restaurants prosper in recession
The fast-food industry is booming as US food chains Subway, McDonald’s and Starbucks set out to take advantage of a recession-weary country still seeking some short-term pleasure.
Sandwich chain Subway last week announced plans to launch 600 new stores during the coming three years and, in turn, create as many as 6,000 jobs. Meanwhile, McDonald’s said it planned to create up to 2,500 jobs in 2012 through new restaurants and 24-hour outlets.
Starbucks, with 300 outlets and 5,000 jobs believed to be planned over the coming five years, is also currently battling it out with domestic chains such as Costa Coffee and Greggs for supremacy on the high street.
With over 1,400 branches in Britain, Subway now has five times as bigger presence as it had in 2004 but its founder Fred DeLuca, who visited London last week to speak at a franchise conference, said that everybody eats three meals per day, it’s just a matter of where they eat. He explained that the longer-term trends show that people now eat out more often.
Analysts say firms such as Greggs and Subway, which both offer lunches for £3, are weathering the storm due to the fact that the appeal to cash-strapped consumers who are looking for affordable treats instead of spending money on video games and new outfits.
The coalition’s hopes of the private sector being able to pick up the slack for the job losses in the public sector has meant that McDonald’s and other fast-food chains’ expansion plans have come as a welcome boost for the government. Nick Clegg toured McDonald’s UK trading centre last week and said that the big jobs figure was “fantastic news”.
However, like other developed countries, the UK has a much-documented weight problem. Experts also question if the economic pain will shift to fast-food outlets and coffee shops if the industry completes such radical expansion plans.
It is not just the service which is quick in the fast-food sector, revealed Local Data Company (LDC) research. In the last five years McDonald’s has seen Subway overtake it, only for Greggs, which boasts 1,550 branches, to become the biggest chain of the lot.
DeLuca insisted that Subway is not risking over-expanding, explaining that when they reach 2,000 stores, they will have roughly one outlet for every 30,000 people living in the UK. He added that this was actually a fairly low density as there is one branch for every 12,000 people in the US.
According to the LDC there are over 47,000 takeaway food stores in the UK. However, it points out that less than a third are run by the big companies and that the smaller independent coffee shop owners and bakers are the ones likely to suffer as a result of the tough economic climate.
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