Key factors to check the feasibility of a Fast Food business

It is interesting to note that the GenX population globally is ready to experiment with different categories of fast food that includes burgers, fries, sweets, ice-creams and yogurts. Fast food chains are experimenting with a wide range of global cuisine that can include anything from Middle Eastern to Chinese or Western to Indian food. Any fast food project will require a team of experts who will identify the customer preferences and make necessary changes to the menu on a frequent basis that will keep customers coming back to the stores. The menu will need to be modified to the taste of the local population. In many regions globally there is a very large presence of expatriates. There will always be a need for a standard menu for the expatriate population especially if the project is in a large city.

The prospect of opening a fast food restaurant in any global region today especially in India, Middle Eastern counties like Saudi Arabia and UAE look bright. Some of the points that can be considered are:

·       Fast food will remain the most valuable category within consumer foodservice appealing to a broad range of consumers. Rising disposable income levels will enable a widening range of consumers to buy fast food on a regular basis and will also encourage consumers to trade up within fast food.

·        Chained burger fast food are predicted to see the best performance with leading players such as McDonald's, Herfy, and Burger King will likely seek to grow their presence in these regions. They will invest in more advertising and promotions.

·       Large master franchisee of global players with strong brands will benefit from strong brand equity, frequent TV and billboard advertising and its range of attractively-priced meal deals.

·         Growing number of gourmet foods is affecting the overall fast food industry. New brands are being introduced that will put greater pressure on existing fast food companies, such as McDonald’s and Burger King.

Analysis of key supply-side and demand trends for fast food

Social and cultural changes

If you are doing a Feasibility Analysis, there will be a clear indication that the consumption and development of Western fast-food chains are directly correlated to the social and cultural changes over a generation. Shopping malls in Dubai or in cities like Mumbai, Riyadh or Al Khobar where many locals spend much of their evenings out, even on weekdays have fuelled the demand of the fast food industry or quick-service restaurants (QSR), particularly international franchises.

Increased disposable income

Economic growth in recent years has helped in increasing per capita income across many countries in Asia, South America and Middle East. With higher income, large number of people can afford fast food frequently.

 Marketing and Product Promotion Trends

QSR chains are constantly launching new and innovative fast food recipes and promoting them with aggressive advertising campaigns. Advertising is considered a necessity to win consumers. Competitive pricing, weekly promotional offers or pamphlets and the ability of retailers to offer a wide selection of products at completive prices are key promotional strategies followed by retailers.

Population Growth

The young and growing population is more inclined to have fast food than the older generation and this is driving the demand for fast food in countries with a younger population.

Reasonable prices

Fast food items are priced competitively and many people can afford it. Most meal packages with fries and a coke are priced at 4-5 USD.  Multinational food chains may cost more than locally made items. The most common local fast food in countries like India and Middle East are kebabs, roasted chicken etc. There is also a fair share of vegetarian fast food in India that include chats, paneer and vegetable based burgers, pasta etc. The good taste of fast food combined with reasonable rates is driving popularity globally.

Other Trends

·         Fast food continued to be the most valuable category within consumer foodservice

·   Government measures aimed at boosting consumers' disposable income and fast food being an affordable pricing option is driving growth in this segment.

·       Transaction volume and spend per transaction rose at a much faster pace than the increase in the number of outlets.

·         The leading channels in fast food are meanwhile those with traditional appeal. Bakery products and fast food are major attractions in the Middle East especially Saudi Arabia. Majority of outlets are focused on traditional Arabic bakery products and offer affordable prices.

·         There is growing interest in less developed channels with customers interested to experiment at outlets with strong branding.

·        Independents dominate fast food, accounting for a major share of outlet volume, transaction volume and sales volume.

Location Strategy

Location is one of the key success factors for a QSR. The stores should be established keeping in view the following points

·         Easily visible and accessible

The restaurants will be set up in such a way that it will be easily visible and accessible for the customer. An establishment which is on the wrong side of the street and does not take advantage of traffic flow could be doomed for failure unless the unit is a well established chain.  

·         Sufficient space for seating and takeaway arrangements

A fast food/quick service restaurant needs to have an efficient infrastructural arrangement for smooth flow of operations. One of the prime requirements is to create a layout that will have a lasting impact on customers. A sense of efficiency, cleanliness and comfort will not only bind the customers to revisit the restaurant but also help in systematic internal operations.

Layout Strategy

Costs will be funneled toward key elements of the plan that include eating area and kitchen. Though the layout will ensure maximum utilization of space, the focus will remain on comfortable sitting, efficient kitchen and enough space to move around for customers and clean-up staff. The entrance will be designed to make it look inviting. The major highlights of the layout strategy that should be focused while doing a feasibility study are as follows:

v  Proper seating arrangements

Proper seating arrangement ensures that the customers do not have to wait in queue for a long time after giving orders. They can place orders and relax at any table until the food is brought to them by the floor boy/staff.

v  Maintaining attractive ambience

Nowadays trend of assessing the quality of the services in based upon the physical environment. Customers expect certain style and atmosphere which should be provided in the restaurant. This will surely be an added advantage in penetrating and grabbing the market. Visually attractive and well lit internal environment, bright colors and group eating zone will make customers feel safe, comfortable, and confident and tend to return for a repeat visit.

These factors if adhered to can be a good starting point for someone wanting to start a fast food or a QSR chain. 

Middle Eastern food trends

What’s up on Social Media

On Instagram Shawarmas are the Middle East's most tagged food. To date, the humble shawarma has been tagged an impressive 533,182 times – not taking spelling variations into account. Pizza is the most shared dish on Instagram with an impressive 39,403,430 tags under its cheesy belt. Also on the list are sushi (24,392,529 posts), pho (2,412,928 posts), kimchi (1,558,017 posts) and pad Thai (766,828 posts) from Asia.There are 13,959,500 burger posts and 7,538,406 taco posts.[1]

Middle East foods becoming common in the West

Middle Eastern cuisines are no longer relegated to blanket descriptors like Middle Eastern or Mediterranean, as more U.S. operators explicitly bill themselves as Lebanese, Persian, Armenian, and Israeli. In the process, Americans are waking up to the deep nuances of this aromatic, wholesome, vegetable-heavy food, whose origins lie with the start of civilization.[2]

Foodies in the UK are increasingly turning to falafel, hummus and kofta to fill their stomachs, according to recent findings by research and consulting companies CGA and ­AlixPartners. As the country’s restaurant sector continues to struggle, several American, Italian and French eateries have closed amid the crisis, but Middle Eastern food has managed to buck the trend.[3]

“The rapid growth of restaurants focused on certain cuisine types highlights how they can quickly find favour in response to the fast-­changing tastes of British diners,” says Graeme Smith, managing director of AlixPartners.

Twitter handles for Lebanese food

@Abou_Abdalla, @Marooshmiami, @Bakchich_ , @dadshomekitchen

Some common Middle Eastern food

Tabbouleh Salad, Classic baba Ghanoush, Falafel, Hummus, Roasted Aubergine Houmous and Pita Bread

Based upon these trends we can see that opening up a Middle Eastern restaurant in UK or USA is a good proposition once the pandemic is over. This is a good time to start on your business plan!

If you are thinking to get started on your fast food business plan or a more detailed feasibility study for a fast food restaurant drop in a mail at info@intelligentq.co.in