EAE Business School has presented its report entitled “Expenditure on fast food 2015”, an analysis of the current status of the fast food market both in Spain at a national and regional level and in the most important economies around the world. The report analyses the state of the sector, main competitors and spending per inhabitant, as well as making predictions of the situation of the fast food market over the next few years.
General conclusions to be drawn from the analysis include the fact that the revenue generated by the fast food sector in 2013 in Spain was 3,226 million euros, representing an increase of 6% compared to the previous year. McDonald’s leads the field in the fast food category, with a market share of 40%.
Moreover, the number of outlets of fast food and home delivery chains reached 4,420 in 2014, 225 more than in 2013. 77.8% are managed as franchises, while the remaining 22.2% are privately owned businesses. In terms of newly opened franchises, there was an increase of 2.5% in 2014, compared to a drop in the number of privately owned outlets of 4.6%.
In total, 1.98 billion euros was spent on fast food in Spain in 2014, an increase of 6% from 2013. On average, each Spaniard spends €42.61 per year on fast food, one of the lowest figures in Europe and only beaten by Italy. However, fast food in Spain is one of the most expensive in Europe, with each transaction costing an average of €4.26.
With respect to the Autonomous Communities, the regions that spend most on fast food are Catalonia, Andalusia and Madrid, while at the other end of the scale we find La Rioja, Navarra and Extremadura. In addition, the regions that spent most on fast food per capita in 2014 were the Balearic Islands, Canary Islands and Madrid, while those that spent least were Extremadura, La Rioja and Valencia.
Internationally, the ranking of countries that spend most of fast food is headed by the United States, followed by China, Japan, Brazil and India.
In terms of forecasts for the future, expenditure on fast food in Spain is predicted to rise by 50% over the next five years, to reach 2,942 million euros. Elsewhere around the world, in 2019, the leading fast food markets by volume will be the USA, China and Japan.
SNAPSHOT OF THE FAST FOOD SECTOR IN SPAIN
According to the report produced by EAE, the turnover of the fast food sector in Spain in 2014 reached 3,226 million euros, climbing 6% from 2013 due to the recovery in terms of private consumption and, above all, greater spending on tourism and leisure. In 2014, the number of outlets of fast food and home delivery chains reached 4,420, 225 more than in 2013. Of this total, 77.8% are managed as franchises, while 22.2% are owned businesses. The number of new franchises opened in 2014 rose by 3.5% in 2014, while the number of privately owned outlets fell by 4.6%.
EAE Business School reveals that the sector is characterized by being highly concentrated, with the five leading companies accounting for 74% of the total world market in 2014. McDonald’s is the clear leader of the fast food sector in Spain with a market share of 40%, as well as being the leading company in terms of franchises, with 474 outlets across the country. It is followed by Burger King, with a market share of 22.5%, Pans & Co, with 4.4%, Rodilla, with 3.6% and KFC at 3.1%. One case worth highlighting is that of TGB (The Good Burger), founded in 2013, which has managed to record fast growth in 2014, achieving a market share of 1% and opening 31 new outlets over the course of the year.
HOW MUCH FAST FOOD IS CONSUMED IN SPAIN?
According to the report drafted by EAE,Spaniards spent 1.98 billion euros on fast food consumption in 2014, a rise of 6.33% compared to 2013. This figure places Spain among the countries that spend least on fast food out of the largest industrialized economies, with only Italy spend least per capita. Each Spaniard spent an average of €42.61 on fast food, 6.33% more than the previous year, and the lowest figure of the countries analysed, except Italy.
EAE’s research reveals that 465 million commercial transactions related to the sale of fast food were conducted in 2014, representing an increase of 6.37% compared to 2013, and the lowest figure of all of the countries studied. However, the average price is the highest at €4.26 per transaction, a figure that has remained stable over the last few years.
With respect to the Autonomous Communities, the regions with the largest fast food markets are Catalonia, Andalusia and Madrid, with turnovers of 363, 351 and 319 million euros, respectively. The smallest markets are La Rioja, Navarra and Extremadura, with revenues of 8, 22 and 22 million euros, respectively. In terms of expenditure per capita, EAE’s research shows that the regions that spent most on fast food per capita in 2014 were the Balearic Islands, Canary Islands and Madrid, at €98, €61 and 50€ per year, respectively. At the other end of the scale, we find Extremadura, La Rioja, Valencia and Aragon, with an average spend of €21, €25, €25, €29€ on fast food. In other words, someone from the Balearic Islands spends five times more on fast food than somebody in Extremadura, while people in Madrid spends twice as much as their counterparts in Valencia.
How will the Spanish market evolve over the next five years? According to the report by EAE, expenditure on fast food in Spain will rise to reach 2,942 million euros in 2019, representing an increase of almost 50% from the revenue generated in 2014. In 2016, Spaniards are expected to spend €63.77 per person on fast food, climbing 49.65% compared to 2014. In addition, the average price of each transaction is set to rise by 7% over the next five years. The Autonomous Communities that spend most on fast food in 2019 will be Catalonia, Andalusia, the Canary Islands and Valencia, with expected turnovers of 539, 522, 474, 192 and 187 million euros, respectively. Per capita, the regions of Spain that will spend most on fast food in 2019 will be the Balearic Islands, Canary Islands, Catalonia and Madrid, with average expenditure of €146, €90, €77 and €75€, respectively.
THE GLOBAL FAST FOOD MARKET IN 2014
The report by EAE reveals that, in 2014, the countries generating the greatest revenue from fast food are three industrialized economies and two emerging markets: the USA, China, Japan, Brazil and the United Kingdom, with markets worth 162,949, 96,264, 33,206, 23,693 and 18,944 million euros respectively. Sales through fast food chains reached 287,559 million euros in 2014, representing 57.8% of total fast food revenue worldwide, compared to sales through independent establishments, which reached 210,311 million euros or 42.2% of total sales. McDonald’s is the leader of the fast food sector at a global level, with 18,710 outlets, followed by KFC, with 11,798 establishments, and Subway, with 10,109 restaurants.
With respect to consumption, the countries that spend most on fast food are the USA, China, Japan, Brazil and India, with revenues of 65,524, 36,657, 29,396, 12,134 and 11,781 million euros, respectively. The countries that spend least are Italy, Spain, Australia, Germany and Canada, at 1,687, 1,980, 4,207, 4,721 and 6,242 million euros.
The greatest consumers of fast food are the inhabitants of Japan, the United States and Australia, with average expenditure per capita of €231.35, €205.37 and €178.06. At the opposite end of the spectrum, we find Indians, Chinese and Italians, with each inhabitant spending an average of €9.30, €26.94 and €28.14 per person on fast food.
How will the global fast food market evolve between 2014 and 2019? According to EAE Business School, in 2019, the largest fast food markets in terms of overall revenue will be the United States, China and Japan, at 74,739, 45,452 and 31,644 million euros, respectively. The three countries expected to spend least on fast food consumption by 2019 are Italy, Spain and Australia, with revenues of 1,882, 2,942 and 4,755 million euros, respectively. Spain, Brazil and China will be the countries that experience the greatest growth in terms of spending on fast food over the next five years.
“The economic recovery happening both in Spain and generally at a global level is having a positive impact on the hospitality sector, one of the key sectors for economic recovery, as can be seen in the case of Spain, which has based a large part of its economic growth on tourism. In Spain in 2014, it can be observed that there was a moderate recovery in the sector, basically due to the increase in private consumption and expenditure on tourism and leisure. Moreover, the forecasts are positive as it is predicted that, over the next five years, the recovery that started in 2014 is going to stabilize and reach positive figures that have not been seen since the start of the recession in 2008” concludes Marta Riera, a researcher at the Strategic Research Center of EAE Business School and author of the report.