Hughes

Service is a Key Ingredient

The True Impact of Network Outages on Quick Serve Restaurants

Post-World War II America involved far more than returning GIs and migration to the suburbs. Nicknamed the “Golden Age of Capitalism,” this era was characterized by higher disposable incomes and increased rates of automobile ownership among the working class. Complementing this was the Eisenhower Interstate System, a government initiative linking major US highways.

Consequently, everyday Americans started venturing en masse beyond their hometowns for the first time. Capitalism readily responded with roadside motor inns, attractions, and hamburger joints ready to serve them quickly and affordably. Prior to this, travel and dining catered largely to affluent individuals.

By 1970, fast food chains—or quick-service restaurants (QSRs)—were generating an estimated $6 billion, and many had become household names. But by the 1990s and early 2000s, the picture began changing. Better educated, dual-income households were growing. They had less time to prepare food but wanted healthier options. Soon, traditional QSRs were joined by fast casual chains offering affordable food that was fresh, high quality, and quick to procure.

In 2017, the National Restaurant Association estimated that QSRs generated $234 billion, out of a total $799 billion in food service sales. Roughly 50 million Americans visit QSRs daily according to the Franchise Association’s “Fast Food Industry Analysis 2018—Costs & Trends" study.

In recent years, demand for healthier options has spurred the growth of fast casual chains, adding another dimension to informal dining. According to NPD Group’s "Fall 2017 Recount" (Feb. 4, 2018), fast casual chains increased their number of units to 25,118 in 2017.

This healthier food trend is not the only factor challenging QSRs. Higher salary demands among QSR workers, rising food and fuel costs, and a May 2018 FDA mandate that chains with 20 or more locations disclose nutrition and calorie information are impacting profitability. The FDA projected that through 2020, menu labeling compliance will cost restaurants $562 million. The National Restaurant Association estimates that 230,000 restaurants will be affected.

 

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