The big picture
This article appeared in On average, our survey respondents bought lunch or dinner at a fast-food chain four times a month; 13 percent did so 10 or more times. Although three-quarters said the sagging economy didn't affect how often they ate fast food, 22 percent said they eat out at fast-food restaurants less often than they used to because of financial concerns.
Still, fast-food restaurants have weathered the recession better than white-tablecloth and casual restaurants, many of which were forced to offer discounts such as smaller portions at lower prices. "The restaurant industry is immediately affected by how flush consumers feel, so the recession had a huge impact," says Robin Lee Allen, executive editor of Nation's Restaurant News, a trade publication. But things are picking up. After three dismal years, the National Restaurant Association, a trade group, forecasts that restaurant sales will grow by an estimated 3.6 percent this year, to $604 billion. Twenty-seven percent of that total is expected to be spent at fast-food restaurants. Their food is relatively inexpensive to begin with, and they've attracted new customers determined to keep eating out but on a tighter budget.
Many chains keep customers coming back with limited-time promotions like Whataburger's Chop House Cheddar Burger and super-cheap options such as Domino's pizza-and-chicken-wing package, $5.99 each. The tactic of mixing low-price choices (think Dollar Menu), patented specialties (McDonald's Big Mac), and some pricier items (Burger King's A1 Steakhouse XT burger) is called barbell or tiered pricing. Its goal is to lure customers with a few heavily advertised loss leaders, then tempt them to buy more profitable items.
That's effective, but experts wonder whether rising commodity and fuel costs will lead to price hikes that cause a double whammy: fewer cars at the drive-thru and fewer customers buying profitable fare.
To enhance the customer experience (and the perception of value), many chains are upgrading their facilities. McDonald's, for instance, is replacing its classic yellow-and-red interiors with muted yellows, greens, and oranges and exchanging its fiberglass chairs for wood and faux-leather ones. In addition, most franchises will add a second drive-thru window; some will also add a TV or two.
Besides remodeling, some chains are allowing customers to place orders online for pickup; expanding their selection of snacks and breakfast items; adding grilled items; reducing fat and sodium; and catering to customers with diabetes or gluten intolerance.
