Source: Photo.com
On May 10, people familiar with the matter said that McDonald's plans to launch a low-cost $5 package in the United States, which aims to appeal to low-income groups affected by inflation.
According to a person familiar with the situation, the package could include a McChicken burger or a double-layered McDouble burger, as well as fries and drinks.
The person familiar with McDonald's said that in order to increase the attractiveness of the package to franchisees, McDonald's has mobilized the Coca-Cola Company to help cover some of the cost of capital, which could help mitigate the potential loss of profitability for franchisees.
But the size of Coca-Cola's investment has not yet been determined, and McDonald's itself is not expected to invest in it, the people said. Coca-Cola has often funded customers' marketing plans.
McDonald's has previously said it has found that in the past few months, low-income consumers in the United States have begun to reduce their restaurant visits and instead cook at home.
Mark Kalinowski, CEO of Kalinowski Equity Research, a restaurant consulting firm, said, "McDonald's sales have been so strong in recent years that they haven't had to. But now that consumers have shown that they are becoming more picky about how they spend their money, McDonald's has had to move with the times. ”
On April 30, McDonald's CEO Chris Kempczinski said on the company's financial call: "Consumers are more cautious about their daily consumption due to rising prices, which puts pressure on the fast food industry...... McDonald's must focus on affordability to attract consumers. ”
The market size structure of China's fast food industry
From the perspective of market consumption structure, the consumption structure of China's fast food market is stable, with the proportion of Chinese fast food market always exceeding 70%, and the proportion of Western fast food accounting for about 25%, with Chinese fast food and Western fast food accounting for 70.7% and 25.4% respectively in 2021.
Market competition in China's catering industry
According to the data, in 2022, the top 10 brands in mainland catering brands are McDonald's, Haidilao, KFC, Xiabu Xiabu, Meizhou Dongpo, Xibei Xiaomian Village, Heytea, Zhengxin Chicken Steak, Juewei Duck Neck, and Mixue Bingcheng.
The market size of China's fast food industry is expected to exceed 1.7 trillion yuan
On the basis of the consumption of 1.4 billion people in the mainland, with the improvement of urbanization level and consumers' pursuit of food safety and fast convenience, the mainland fast food market will continue to grow in the future. It is estimated that in 2027, the market size of the mainland fast food industry will exceed 1.7 trillion yuan.
Han Ming, president of the China Hotel Association, said that the mass catering market has ushered in a new trend of upgrading, and quality, safety and taste are the key to attracting consumers for catering companies. On this basis, the process of distinctive, cultural and experiential consumption is the focus of catering enterprises to win the market.
Wen Zhihong, partner of Hejun Consulting and head of chain operation, believes that in the future, as catering companies continue to sink into the market, they should comprehensively consider their own business models, brand awareness, business strategies, pricing strategies, etc., and even the commodity structure should be reconsidered to see if they can meet the requirements of local consumers. At the marketing level, it is also necessary to be more flexible and changeable, and provide consumers with diversified services with a continuous innovation attitude. Only by combining a variety of factors can we form our own competitive advantage.
Prospective Economist APP Information Group
For more research and analysis of this industry, please refer to the "China Catering Industry Development Prospect and Investment Forecast Analysis Report" by Qianzhan Industry Research Institute
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