The global fast food restaurants industry

It has an estimated total revenue of about $1.86 trillion (in US dollars) in 2012.

The industry is estimated to account for revenue of $706.7 billion in 2012, or about 38 per cent of the global food service sub-sector. Industry revenue is estimated to increase at an annualised 2.1 per cent in the five years through 2012, with a 3.2 per cent increase expected in 2012.

Developed nations will account for about 83 per cent of total global industry revenue in 2012, led by the United States with 58 per cent of total industry revenue. In the five years through 2017, industry revenue is forecast to increase.

"The industry is approaching saturation levels in some developed countries due to an oversupply of fast food businesses and extensive franchising, which is contributing to weaker revenue growth and demand in these countries," IBISWorld industry analyst Alen Allday said.

Health and obesity concerns also negatively affect the industry. However, growth in developing nations, particularly China, is benefiting major operators.

Global industry competition spiked during 2009, as the global recession deepened and unemployment increased in the United States and other nations.

This generally depressed household disposable income growth and therefore expenditure on fast food. Lower guest traffic through stores resulted, as well as reduced average spending.

Customers searched for more value, and operators responded by offering low-priced meal deals and discounts.

According to Allday, the opening of new stores across developing countries contributed to strong industry revenue from 2010 and 2011.

Some operators increased their promotional efforts to attract customers and maintain their market positioning and image so as not to lose ground when the cyclical economic upturn occurred.

Increasingly, cost reductions and efficiencies were instituted, including the closure of underperforming stores, the purchase of stores from franchisees and staff reductions.

Industry concentration measures the extent to which the top four players dominate an industry. IBISWorld estimates that in 2012, the top four global players, all based in the US (McDonalds', Yum! Brands, Doctor's Associates, and Burger King) will account for about 23.5 per cent of the available market share. This provides this global industry with an overall low concentration level.

The global fast food restaurants industry is highly fragmented, with a high proportional share of single-owner establishments (as distinct from franchised and chain operators) providing a diverse range of cuisine and fast-food choices to customers across the globe.

By 2017, it is expected that the major global operators will only increase their market share marginally, despite the opening of more stores in high growth developing countries. Their growth in establishments will continue to be overwhelmed by local single-owner establishments offering more local, traditional and in-demand food styles.

However, the concentration of the major franchised and chain operators within developed nations will undergo further consolidation, as they continue to battle with a low revenue and profit growth environment due to market saturation.

Consolidation will involve underperforming site closure, as well as the possibility of mergers between the largest operators and second rung ones, which are offering products more in tune with changing consumer demands.

This includes more healthy choice meals, as well as specialties such as seafood, chicken and even Mexican fast foods.
 

Source: PRWeb