The Growth of Fast Food Industry in the US

In the 1990s, though, there has been a shift for the industry as a whole so that improvements in the U.S. economy have also meant improvements in the profit picture for fast food franchises. Real growth in 1994 exceeded projections to achieve a growth of 2.9 percent on total sales of $283.2 billion. Growth for 1995 was projected at 2.5 percent for total sales of $296.3 billion. Among the improvements in the economy that aided the fast food industry were a 2.8 percent increase in the GDP, an unemployment rate down to 5.9 percent, inflation at 3.6 percent, and disposable income at 2.9 percent. Operators were focusing their marketing on strategies emphasizing "family values" and family togetherness, and these concepts were reflected in menus, marketing, and staff training (Bartlett, 1995, 44-48).

In some areas of the country, increases in sales were much greater than in others, and regional

Another trend in the industry that is likely to continue is the introduction of fast food outlets in cities reflecting different cultures and styles. This means not only more Mexican and pizza restaurants but curry outlets, Chinese restaurants, and Japanese noodle restaurants.

The management of Carl's Jr. has also tried to enter this same market, and this was part of a failed attempt to expand nationally in the 1980s. What is seen as necessary for such a move is a store with good food, a solid regional base, and a clear public identity. Karcher opened three dozen outlets in Texas, many of them franchised. The stores at the same time expanded their menu, offering four "charbroiled steak" dinners served as platters with steak, chicken, trout, or ground round. This was a miscalculation first of the Texas economy, then weak, and second of the fast-food business. The new restaurants were too large, and the addition of the dinner platters an expensive error, requiring the addition of dishwashers and other equipment. The public makes a distinction between fast-food stores and coffee shops, and it expects certain kinds of food and certain kinds of service from each. There is thus a line that should not be crossed by a fast-food restaurant, though it is also a line that is always shifting. Twenty years ago, the norm for a fast-food restaurant was that people bought their food from a carry-out window, and any dining facilities were Spartan. Today, comfortable and well-decorated dining rooms are common in such facilities. Fast-food breakfast was once unusual and is now the norm, along with such additions as salad bars and drive-through service (Paris, 1988, 64).

 

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