Collo vs McDo

Press · 1 Jan 1995

H&R review

Document in the case file dated 1 Jan 1995.

Type
Press article
Date
1 Jan 1995

Summary

Summary sheet

Survey of restaurant chains — Revue technique des hôtels et restaurants · January 1995

Overview: trade press article published in the Revue technique des hôtels et restaurants of January 1995, presenting the summary of a survey by Gira Sic Conseil on commercial restaurant chains in France.

Key points

Based on 1993 data, the survey identifies 84 chain brands and a total of 2,416 units, with turnover of 22.9 billion francs including VAT, i.e. 17.5% of the total turnover of French commercial catering, with nearly 40% of the brands located in Île-de-France. McDonald's comes first with 300 units and turnover of 5 billion francs, ahead of Casino-Marest (2.5 billion) and Quick (2 billion). The article reports McDonald's International's “magic formula” for assessing its expansion potential, estimated by Fortune magazine at 42,000 restaurants worldwide and 2,237 for the French market. Finally, it compares annual fast-food spending per inhabitant: 1,700 F in the United States, 160 F in France and 16 F in Italy.

Significance

Without any direct link to the dispute, this document records the market context: McDonald's dominant position and rapid growth in France at the time of the events, the framework within which the expansion decisions challenged by the franchisee were made.

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Survey Restaurant chains The moment has finally come to present to you the summary of our major survey on commercial restaurant chains. After having studied each market in detail, Gira Sic Conseil presents here a complete analysis of chain catering. Quick Casino Cafetéria Morest According to the information supplied by the various operators for 1993, Gira Sic Conseil was able to identify 84 restaurant chain brands, a network of 2,416 units having achieved a turnover of 22.9 billion francs including tax, which represents 17.5% of the total turnover of commercial catering in France. Nearly 40% of these brands are located in the Ile- de-France region. McDonald's champion in all categories The first three brands in number of units and turnover are McDonald's with 300 units and a turnover of 5 billion francs, Casino-Marest with 2.5 billion francs and Quick with 2 billion francs. Eight of the ten leading brands ranked belong to the economy segment. The rapid growth of Mc Do- nald's is such as to worry certain operators. It is indeed interesting to note that an American spends on average 1,700 F per year in a fast-food restaurant, a French person The 3 leading brands by turnover and number of units McDonald's International's magic formula Population of the country in question Number of inhabitants per McDonald's restaurant in the U.S.A. (25,000) Annual income per head in the country in question Annual income per head in the U.S.A. ($23,120) Potential penetration of McDonald's in the country in question 30 / REVUE TECHNIQUE DES HOTELS ET RESTAURANTS / JANUARY 1995 his ur je CS du te es le- en af- est et 3T- par 160 F and an Italian 16 francs. Southern Europe seems to show more resistance towards fast food although France exceeds by 25 francs the average German expenditure (see table 1). McDonald's International has developed a formula to assess the number of points of sale they can open (see box). The magazine "Fortune" did the calculation: McDonald's can still open 42,000 restaurants in the world and the potential French market would be 2,237 restaurants! The 3 best changes in the network in 93 The growth of Pizza Hut results from the purchase of the 35 points of sale Spizza'30, the American chain's restaurant network not having changed. Of the 35 brands that duplicated themselves in 1993, only 7 recorded more than 10 additional units, the majority not exceeding 3 units. If McDonald's opens more than one restau- rant a week, let us not forget the performance of Buffalo Grill which opens two a month with all the constraints and the logistics necessary that the chains know well. 16 brands saw their network decrease during the year 1993. Among them, we will note: La Crois- santerie (- 10 units), La Viennoi- serie (- 4 units), Manhattan Burger (- 4 units), L'Arche (- 3 units) and B'Burger (- 3 units). The 3 best performances in turnover per unit In this ranking, the large brasseries largely dominate the Fast-food consumption (in francs per inhabitant in 1993) United States.. Japan ,..470 Great Britain FRANCE....... Germany Spain... Italy.. Source: Euromonitor/Gira Sic Conseil. The 3 best changes in the network in 1993 market. The brasserie des Frères Blancs (43 million F) is number 1, closely followed by the bras- serie Flo (41 million F). Pizza Pino and Hippopotamus come joint third with a turnover of 27 million F. Quite logically, the brands positioned in the "expensive" and "luxury" segments are those that generate the highest turnover per unit. Average spend/year in a fast-food restaurant 1,700 F 160 F 16 F REVUE TECHNIQUE ÉQUIP'HÓTEL / 31

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