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Beginning of the end for fast food?

22-Jan-2003

Related topics: Industry & markets

Fast food chains such as McDonald's and Burger King need to start listening more to what their customers want or face the prospect of extinction, claim US-based food market analysts this week.

Phil Lempert, chief executive officer of SupermarketGuru.com, said that a poll carried out by his consumer website showed that 60 per cent of respondents are eating less fast food than they were a year ago, and that a third of those who participated feel that chains like McDonald's and Burger King will be forced to downsize due to the declining appeal of their trademark products.

"It's already happening," Lempert said. "McDonald's has announced its first quarterly loss ever, and the second largest Burger King franchisee has filed for bankruptcy. Most disturbing is that both these companies think the way to recapture consumer attention and loyalty is through price cuts; value menus and 99 cent burgers. They aren't listening to consumers."

What the poll shows, according to Lempert, is that consumers in the US want a greater variety of products and healthier, more nutritious meals. Almost a third of those responding to the SupermarketGuru.com survey said that fast food chains should add healthier food to their menus, including products lower in fat and calories, lower in sodium and with less frying used in food preparation. Almost one in five people responding said that they wanted a greater variety of foods.

"In many ways, we feel these numbers just scratch the surface of consumer discontent with the fast food experience, and that if chains don't change their basic approach to food, they will disappear," said Lempert. "Their window of opportunity may be as small as five years or they may be irrelevant to the market place."

He continued: "These companies must make enormous and important changes in their approach to food, to consumers, and to the health-related issues. They need to be proactive about questions regarding food safety and food security, and will have to deal with the issue of childhood obesity in a way that is both responsible and responsive."

Fast food outlets in Europe already carry a wider range of products than some of their counterparts in the US, or even in other European countries - McDonald's restaurants in France, for example, have a wide range of salads which are not sold in the UK, let alone the US - so catering for differing local tastes is not a new challenge for these companies.

But the problem, as Lempert points out, is that the companies seem to be ignorant of the fact that their US consumers want a change, and that is far more serious a problem. For any business dependent on consumers, it is vital to remain in touch with what those consumers want, even if that means a radical overhaul of the range of products on offer, as Lempert suggests would be the case.

With US obesity levels higher than ever - and with the UK catching up fast - the fast food chains are increasingly being seen as the culprits in markets where they have traditionally been popular. This wave of anti-fast food sentiment threatens to engulf the industry unless it is prepared to act quickly and decisively.

It is hard to imagine a world without fast food - modern lifestyles demand that food becomes even more convenient, in fact - but ten years from now we may see many more salad bars and heath food outlets alongside the burger, pizza and taco outlets, and for many people that will be a major improvement.