Quick Bites – Part 1: Maintaining Momentum and Maximizing Profit Margins
A&M’s Travel, Hospitality & Leisure practice presents Quick Bites, a series on how quick service restaurants (QSRs) can profitably deliver outstanding experiences to customers as they navigate the current market.
How Can Quick Service Restaurants Navigate the Challenging and Evolving Industry Landscape?
The QSR industry is currently experiencing a remarkable surge in growth, characterized by significant consolidation and acquisition activities. Between 2021 and 2022, leading QSRs achieved an impressive average sales growth rate of 4.6 percent along with a notable 2.9 percent increase in their store counts. While the industry basks in this positive momentum, stakeholders, including corporate entities and private equity firms that predominantly own QSR brands, are diligently exploring strategies to sustain this growth trajectory and enhance overall profitability.
However, inflation is a persistent issue that poses a concern for both QSRs and consumers. In response to the mounting cost pressures and to protect their profitability, most QSRs resorted to price increases ranging from five percent to ten percent in 2022. This move resulted in a concerning four percent to six percent reduction in customer traffic during that period. QSRs are now grappling with the challenge of striking a delicate balance between pricing and shifting consumer behaviors in this dynamic market environment.
What Steps Can Quick Service Restaurants Take to Sustain Profitable Growth?
Although the QSR operation varies significantly across different operating models, market and geography, there are best practices that QSR brands can take to prepare for a profitable future and enhance customer experience. These strategies include:
- Optimizing Cost Management
- Streamlining Operational Complexity
- Pursuing Strategic Expansion
- Elevating the Customer Experience
How Can A&M Help
The QSR industry faces critical decisions ahead, and a lack of action could yield unfavorable outcomes. Neglecting to address the QSR industry’s evolving dynamics may result in missed opportunities and reduced competitiveness.
A&M’s global, market-leading Travel, Hospitality and Leisure team understands the industry, its influencing trends and business situations that require deep expertise. Leveraging our expertise and insights, we offer tailored services to empower QSR brands to not only navigate but also excel in a rapidly changing market, ensuring profitability and delivering a satisfying dining experience for their valued customers.
Contact us today to learn more about how A&M can help you take action.
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