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Fast food market set to grow rapidly in China

Industry Sector

Food and Drink


8 November 2010


Mike King

Type of News


While still dwarfed on a global level by the larger independent sector, chained restaurants as a group have seen strong, steady growth over the last five years, with double-digit annual growth rates common over the review period. This expansion has taken place across a wide range of markets, both developed and emerging alike -on a global level, there has been a move towards more standardisation, better quality, and more coherent branding, with major global chains like McDonald's and YUM! Brands joined by increasingly competent local/regional operators such as Nando's in South Africa and the UK, Chipotle Mexican Grill in the US, and others.

This is partly due to strong, steady growth among the largest global brands -rising disposable income and greater time constraints have boosted demand for chains such as McDonald's and KFC, while exposure to these chains has, in turn, created greater demand for the kind of consistency and quality chained brands offer. As this report will show, the success of chained foodservice has also boosted demand for local partners, with the dominance of the franchise business model making competent local operators a priority. As a result, many of the largest, most successful franchisees have become sizable businesses in their own right, creating a whole new category of innovative, well-capitalised operators.

While developed markets such as the US, France, and Canada will remain important, emerging markets are expected to lead in both absolute and percentage growth of chains over the forecast period. China is projected to lead all markets in absolute growth, adding more than US$7 billion in chained sales over the next five years, while Romania is expected to lead in percentage growth, expanding more than 120% over the forecast period.

Author: Paul Chapman, Analyst


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