Fast food is witnessing a fast decline in US sales
Thursday, July 23, 2015
It seems that Americans are not eating out as much they used to. Growing awareness for health and nutrition has finally seeped deep into the American psyche. It's not just the health freak who likes to work out zealously and eat right; it seems most Americans want to do the same.
The direct result of this growing awareness is decreasing instances of eating out, a phenomenon that has been an intrinsic part of urban America. The figures for the last three decades, in fact, are at an all-time low. Latest market research from the NPD Group shows the average American eats out at a restaurant only 74 times a year. At first the sit-down restaurants gave way to more take-out meals, but even that is slowly waning.
There are several reasons for this change. Health is, of course, an important one. Many people are realizing how lifestyle changes can reduce obesity and the health problems it causes. This has them reconsidering their diet and exercise regimen. Eating fresh-cooked food at home has become more popular, even with busy individuals.
Higher-quality prepared meals make it easy to eat at home rather than grab a fattening burger from a drive-thru. These meals are easy to prepare and still have fewer calories than any fast food, which is a win-win for all.
To top it off, the market is filled with healthy eating options that one can carry and grab on the go, like sandwiches, yogurt and granola bars, which make for better choices than fast food.
Another major reason for this change is money. The Great Recession not only shook up the financial markets, but it also affected American homes as well. Job insecurity and a bad economy led to stricter household budgets and more cautious spending habits. Less income means less eating out as well.
According to the Bureau of Labor Statistics, Americans spent 7 percent less on eating out in 2010 than 2009, a figure that has significantly gone down since then. Buying groceries and eating in has risen in the mean time because it's a much cheaper option. Of course, it's not always a case of preparing fresh home-cooked meals. A lot of it is about packaged and prepared foods, but it's still eating in nevertheless.
So does that mean that Americans are avoiding all restaurants? Interestingly, they are favoring full-service restaurants rather than opting for fast food, which had been the popular option before. Studies conducted by the American Consumer Satisfaction Index (ACSI) show that dining at fast food restaurants fell by 3.8 percent to 77 (on ACSI's 100-point scale), while the full service options held steady ground at 82.
While cost is a deciding factor, when people want to spend they are more focused on quality and getting better value. It is probably for this reason that fast-casual brands like Chick-fil-A, Chipotle and Panera are doing better than regular fast food chains like McDonald's or Burger King. Focusing on quality and great customer service seems to have paid off for these brands.
Fast food brands are now increasingly associated with greasy, high-calorie food. With various food safety rumors and allegations that have been attached to them in recent years, these brands have suffered even more.
New research conducted by financial-services firm Janney Capital Markets shows more Americans are swapping soda and burgers for coffee and healthy sandwiches. The research notes that Burger King and Wendy's may fall from grace big time and may be knocked-out of the top five fast food chains by 2020.
McDonald's has seen sales drop by 3.3 percent in 2014, while soda consumption has lessened to such a degree that they are matching 20-year-old figures.
The results are clear: More Americans are veering toward homemade and sustainably produced foods rather than settle for the quick and easy fast food.
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