Healthier Menus Broaden Appeal
With value top-of-mind in these troubling economic times, sales of fast food are on the rise.
The category ranks fourth in overall brand value growth with a year-on-year rise of 16 percent. The brand value of two of the leading fast food restaurants – McDonald’s and Burger King – is up by 34 percent and 15 percent, respectively.
This strong performance is about more than being in the right place (low-price focused) at the right time (during a recession). The category leaders have adjusted their menus not only to emphasize value for money, but also to meet the consumer demand for healthier ingredients.
SUBWAY, number two in the fast food category ranking, added a price message to its long-held position as the nutritional sandwich alternative to the hamburger chains. KFC, third-ranking in brand value, expanded its signature chicken menu to include fish and beef.
The chains also designed menus to build sales throughout the day. McDonald’s experienced the greatest growth in customer traffic, driven by its improved coffee offering and the introduction of its McCafé. Originally a coffee house concept, McCafé now refers to a line of espresso-based drinks that the chain will introduce to most of its 14,000 U.S. outlets by the end of 2009.
International expansion, particularly in Asia, also contributed to the fast food category’s strength. Even Burger King, which had been focused primarily on North America and parts of Europe, is increasing its presence in Asian markets.
SUBWAY, with almost 31,000 outlets in 88 countries, is challenging the global reach of McDonald’s, which operates about the same number of restaurants in 119 countries.
Wendy’s increase in brand value is the fourth strongest year-on-year improvement among all categories in the BrandZ study. The performance reflects corporate initiatives that more than doubled earnings and produced higher margins in company-operated outlets, following a year of severe losses in 2007.
McDonald’s was one of only two stocks in the Dow Jones Industrial Average that gained in value during 2008.
