Nibble on Some Fast-Food Trends

The latest issue of QSR magazine, a trade journal for the "quick-serve restaurant" industry (which includes fast-food and fast-casual chains), is out. As I've noted before, such periodicals are a great way to keep up with any industries that interest you, helping you to identify trends that can help or hurt your companies of interest, familiarizing you with up-and-comers, and providing useful data to track progress.

Here are some interesting data points from QSR's annual survey or customers:

• Forty-five percent of respondents visited fast-food establishments at least once a week, up a full 10 points over 2007 levels. What's going on? Well, socked by a struggling economy, people might be seeking out less-expensive lunch fare. We're also getting busier and busier over time, with less time to prepare our own meals. These trends help companies such as McDonald's (NYSE: MCD), Burger King (NYSE: BKC), Wendy's (NYSE: WEN), and Yum! Brands (NYSE: YUM).
• In 2007, Wendy's won top marks as a favorite, but this year, McDonald's took that crown. This reflects a winning strategy to win more business via new products (such as coffee and iced tea), among other things. Lest McDonald's shareholders get too excited, the company was also deemed "least favorite" by the most respondents. So Mickey D’s still has work to do.
• In fact, all fast-fooderies might want to note this: When asked if they're loyal to one particular chain, 57% of respondents said yes, but that's down from 61% in 2007. A growing factor in chain choice is price, cited by 36%, up from 30% in 2007.
• There was much improvement in fast food, according to respondents. Customer service is seen as very or somewhat pleasant by 58%, up significantly from 45%. (This may be tied to our ailing recession. As people value the jobs they have more, they may perform better in them.) Food quality was deemed somewhat or much improved by 41%, vs. 29% last year. Menus were seen as having gotten healthier, too.

Trade journals can be a great starting point to get leads on interesting companies in industries you'd like to learn more about. For instance, QSR was where I first read about Buffalo Wild Wings (Nasdaq: BWLD), which I later bought for my own portfolio. Because trade journals go beyond the biggest names to talk about little-known start-up ventures, reading them can often give you the scoop before a young company hits the mainstream.