Fast (and Slow) Food
Wendy’s is about to pull ahead of Burger King in the U.S. The reason? People care about their lettuce and the shape of their burgers. Led by new ownership, Wendy’s now has 11 different greens (not just iceberg), a slightly rounded bun and burger, and russet French fries with “gourmet” salt. Maybe though the 2010 stats for the U.S. say it all.
- McDonald’s: 14,027 stores; $2.3 million sales per store
- Wendy’s: 5,883 stores; $1.4 million sales per store
- Burger King: 7,264 stores; $1.2 million sales per store
Other food strategies…
- Competing for the “casual dining” market, Olive Garden discovered that gnocchi can make a difference…but only if it is in chicken soup. As for pesto, it was rejected as too green (and strong and oily).
- Referring to TCBY’s successful pistachio frozen yogurt launch, a restaurant trade letter says that pistachio nuts may be the 2012 hot item because they are “exotic but not threatening.”
- And finally, molecular gastronomy with an ultra slow souvide approach will be crucial for upscale restaurants.
The Economic Lesson
On a scale of most competitive to least competitive, the 4 basic market structures are perfect competition, monopolistic competition, oligopoly, monopoly. Competing in monopolistically competitive markets, restaurants try to create a unique identity because there are so many similar firms. Beauty salons, clothing manufacturers and supermarkets also compete in monopolistically competitive markets.
An economic question: In product markets and factor resource markets, how do restaurants compete?