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Euromonitor International’s new and enhanced 2013 edition of Consumer Foodservice is now available in Passport. Building on the 54-country dataset, the new edition continues to strengthen coverage. Global and regional totals also include modeled sizes of non-researched countries, to reflect a truly global market size for Consumer Foodservice in 209 countries.

A world in transition

The US$2.5 trillion global consumer foodservice industry expanded just over 1% in real value terms last year, reflecting tepid growth in North America and a Western European economy which remains in free fall. All was not doom and gloom, however, as sales volumes continued to expand strongly in Latin America and the Middle East, two regions which remain poised for continued expansion over the next decade. Asia, so long the engine of global spending on eating out, saw sales growth slow across the region, with continued stagnation in Japan joined by a slowing Chinese economy, while even growth stalwarts like Vietnam struggled. While the future remains bright for the largest global chains, the days of seemingly effortless growth are long gone, with both McDonald’s and YUM! Brands facing major slowdowns in 2012 and 2013 amidst growth headwinds in high-income markets and a devastating food-safety scare in China, one likely to hamper sales of the KFC brand for the remainder of the year.

Indeed, the real story for chained operators in many markets is just how hard things continue to be—a “new normal” of consumer frugality remains very much a reality in North America, while it is far from clear when the hardest-hit economies of Western Europe will reach bottom. Though fast food chains remain in the driver’s seat in terms of growing sales and taking share, simply offering lower prices and nicer outlets will no longer guarantee a steady stream of cash-strapped consumers looking to trade down, particularly given that nearly every fast food operator has embraced that very strategy. The limits of this strategy were revealed by none other than McDonald’s, which saw its first quarterly same-store sales decline in many years in 2012, following a long stretch of near-invincibility thanks to a steady stream of menu extensions, outlet renovations, and pricing flexibility.

Taking the next step

Yet it must be stated that the prospects for truly innovative concepts remain very bright indeed. Even for the largest chains, the story going forward is one of retrenchment and consolidation leading to renewal, of a pause in growth, rather than a permanent shift. There remains a vast cohort of consumers in Asia, Latin America, the Middle East, and Africa looking to take their place among the global middle class, for whom eating out remains a valued, sought-after experience, and whose enthusiasm will only grow as disposable incomes continue to expand. Meanwhile,
middle-income consumers in markets like China are growing more sophisticated—and demanding—by the day, with real potential for those operators able to offer an experience tailored to their increasingly specific tastes. Even in low-growth high-income markets, there is enormous opportunity for those able to adapt to an increasingly fluid competitive environment. Continued demand for good food in an affordable, informal, social environment—with format very much a secondary consideration—means real opportunity for operators able to forge a distinct identity, whether in terms of food, sourcing, or design.

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