The Fast-Food Industry is Growing Faster Than the U.S. Economy
Burger sales are booming.
Burgers are making big bucks these days. As the New York Post reports, fast-food chains McDonald's, Burger King, and Wendy's each saw same-store sales increases of more than three percent this quarter. While that may not sound like a whopper of an increase—excuse the pun—it actually is when you compare it to the U.S. economy which, as a whole, only rose by a slim 2.6 percent in the latest quarter.
In fact, the Post reports, the U.S. economy hasn't jumped by more than three percent a year in the last 10 years. By comparison, the burger business is seriously booming. McDonald's and Burger King enjoyed same-store sales of 3.9 percent this recent quarter, while Wendy's reported a 3.2 percent same-store sales jump.
So what's behind the spike in these three chains' sales? Industry experts who spoke to the newspaper say diners are choosing fast-food options now more than ever.
"When people spend less at higher-priced restaurants and more [money] at fast food, it means they are spending their money more cautiously," Mark Kalinowski, a Nomura Instinet analyst, told the Post. But, "on the whole, the restaurant industry is going through hard times," he added, a statement that seems to contradict another recent report that showed jobs throughout the restaurant industry are on the uptick.
The food and beverage industry regularly gives the U.S. economy a boost. Take the beer industry, for example: a June 2015 report shows the beer industry accounts for nearly $253 billion in economic activity—plus it provides 1.75 million jobs and contributes $48.5 billion in tax revenue to the country. Pizza also contributes to the GDP: a June report revealed that 41 million Americans eat a slice on any given day. According to the report, that's enough in sales to make the pizza industry a top 100 country in the world based on GDP.
Of course, these trends toward fast food (and tighter spending) aren't going unnoticed by the major chains. That's likely why McDonald's recently announced it will bring back the Value Menu, meaning more cheap eats for all.