Photo: sidstamm on flickr
Yum! Brands and McDonald’s are among the many fast food brands driving full steam for China.For a look at what’s at stake, check out these numbers from Barclays:
With 1.3b people (including 300m+ able to afford western [Quick Service Restaurants]) and GDP growth at 7%+ per year over the next five, the opportunity appears large and the investment justified. The informal eating out (IEO) market is $300b and growing 11% in 2011. With that said, traditional Chinese QSR represents 22% of total industry traffic, and street vendors 18%, both relative to western QSR at only 6%, hence the opportunity. Looking back 20 years, average GDP per capita income was below $450 (US). Such compares to today, where the average is above $4,500, or a multiple of 10. And looking to 2020, such is expected to average $10,000. In addition, by 2025, economists forecast China to be home to nine of the 10 cities with the world’s strongest base of GDP and fastest GDP growth.
Yum! is leading the charge with 18% same-store-sales growth and 12% unit growth. McDonald’s is close behind at 14% same-store growth and 12% unit growth.
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