by Corey Alderdice
There have been a lot of losers in the ongoing recession. Banks, network television and luxury industries have each suffered in one way or another. It seems as though only one industry has remained recession-proof.
Fast food.
You might even say America’s most known brand is even lovin’ it. Despite the odds, McDonalds has been the real winner amid the global recession. As families tighten budgets, the McDonald’s dollar menu has certainly revealed its advantages for consumers. As Forbes explains, it’s all about value:
“I think they have a winning formula from a bottoms-up perspective,” said panelist Carol Pepper, head of Pepper International. “As a company, it is providing value for the dollar, convenience and it’s helping consumers weather the recession in the U.S.”
Sharp on the heels of the Golden Arches is an unlikely competitor: Subway. Thanks to inspired entrepreneur Stuart Frankel, his $5 footlong campaign went from local phenomenon to a national campaign. Thanks to a nearly decade old advertising campaign featuring Jared Fogel and the need to seek innovation, the $5 footlong’s snappy commerical campaign struck gold and Frankel became an unlikely hero:
Customers liked his round number, too. Instead of dealing with idle employees and weak sales, Frankel suddenly had lines out the door. Sales rose by double digits. Nobody, least of all Frankel, knew it at the time, but he had stumbled on a concept that has unexpectedly morphed from a short-term gimmick into a national phenomenon that has turbocharged Subway’s performance. “There are only a few times when a chain has been able to scramble up the whole industry, and this is one of them,” says Jeffrey T. Davis, president of restaurant consultancy Sandelman & Associates. “It’s huge.”
It’s not all sushine and bags of money for the fast food industry, though. Arby’s seems to be one of the lowest on the food chain:
But Arby’s hasn’t done much to break away from the crowd. Clearly, it has been laboring in a difficult environment. Its operations are concentrated in economically depressed areas. The chain wasn’t exactly thriving before the recession. It can’t compete with the big boys (or perhaps even with Big Boy) when it comes to brand awareness, presence, or advertising dollars.
Obscurity is one thing. Having your franchisees sue the company is another story–an all-too-real story for Burger King. Even after voting down the $1 double cheeseburger promotion twice, corporate went ahead with the plan anyway. While the discount is a great deal for consumers, it turns out that franchise owners are losing $.15 on each sale. It looks like both sides are gearing up for a food fight.
Perhaps this is only a taste of things to come.