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Foreign Investment: French Fast Food

May 2, 2013 • Households, Innovation, Macroeconomic Measurement, Money and Monetary Policy • 240 Views    No Comments

Representing 54% of all restaurant purchases, fast food sales are soaring in France. McDonald’s has more than 1200 outlets, Subway has opened 400 stores during the past 10 years and Burger King recently returned to France after leaving 16 years ago.

Why?

One reason might be shorter lunch breaks. In 1975, a lunch break for the typical French worker was close to an hour and a half. Now it has shrunk to 22 minutes. Consequently fewer people have the time for a midday leisurely meal at a traditional cafe. Instead, they are buying fast food.

Another possibility is the sluggish French economy. With unemployment at 10.6% and a GDP that shrank in the first quarter, people have less money to spend at cafes.

And finally, it could be the food. Here is an excerpt from an econlife guest blogger who had just returned from France:

“McDonald’s has been very clever in adapting to French tastes and creating their own versions of traditional French dishes. This means that the menu of a McDonald’s in Paris, France will be strikingly different from one in Paris, Texas. In France, diners can buy such items as ‘Le Croque McDo,’ a riff on the classic French ham-and-cheese sandwich…’Le Charolais,’… a celebrated kind of French beef and even a ‘Mouseee aux Trois Chocolats,’ …McDonald’s version of a classic French chocolate mousse.”

Complimenting McDonald’s baguette sandwich, one 3-star Michelin chef said, ““I’m lovin’ it,”…The garnish is good: There’s plenty of salad and plenty of everything. The bread isn’t a pure baguette because this one is shorter, but it’s good bread…”

France McDonald's McBaguette from Bloomberg

Our bottom line takes us to McDonald’s bottom line. You can see why France is McDonald’s second most profitable market and what a successful foreign investment requires.

Sources and Resources: If you combine this NPR blog on France’s changing culinary culture with this Bloomberg article on McBaguette, a clear picture emerges of successful foreign investing.

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