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The spread of fast food outlets around Great Britain- the early years

The spread of fast food outlets around Great Britain- the early years. Michael Waterson* Department of Economics, University of Warwick (drawing on work with Otto Toivanen and assisted by Jo Sault) Part-funded by ESRC *Speaking in a personal capacity. In the beginning …. Prior to 1974

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The spread of fast food outlets around Great Britain- the early years

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  1. The spread of fast food outlets around Great Britain- the early years Michael Waterson* Department of Economics, University of Warwick (drawing on work with Otto Toivanen and assisted by Jo Sault) Part-funded by ESRC *Speaking in a personal capacity

  2. In the beginning … Prior to 1974 • There was fish and chips • There was Wimpy • And then in 1974 came McDonalds • An innovation, compared to what had gone before: • Opening hours • Speed/ service style • Consistency of product and service • Very successful

  3. Note the pattern of continuous organic growth of the chain

  4. Gross turnover £m Turnover- Coverage McDonalds 900 800 700 600 500 400 300 200 100 0 0 5000 10000 15000 20000 Expenditure coverage, £m Note that as coverage increased, “ available share” remained essentially constant

  5. Total number of districts with a McDonalds (total districts ~450) 300 250 200 150 District numbers 100 50 0 1970 1975 1980 1985 1990 1995 Year How did they manage this? • Combination of broadening and deepening of the chain • Extending gradually across areas • Moving first to areas near London • Infilling in existing areas • See map

  6. This pattern is repeated by several other chains of similar activities, besides McD- e.g. Wetherspoons Really, the puzzle is why it took so long to spread to the further regions- things seem to be swifter now

  7. Some potential answers- significance of McD • Chainstores, really a 20th Century phenomenon • McD is a prime example • Of course the chain has developed further since 1990, but has faced more competition, essentially on its own until then • Falling per-store opening costs • Learning by doing • Professionalization of the outlet planning process • Consultancies on outlet planning • Burger King learning from McDonalds, example • Growing homogenisation of tastes, reduced regionalism? • Other chains have done it

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