The North American restaurant industry was hit extremely hard by the COVID-19 pandemic. The generational health crisis resulted in the closure of many thousands of small businesses in the restaurant space from 2020 through to the end of the pandemic in 2022. Restaurants that were dependent upon sit-in dining were the worst impacted. These businesses attempted to appeal to their customer base by offering services through delivery applications, but many were unable to make up enough ground.
Among those in the restaurant space, the fast-food subsector experienced the most success in the face of the pandemic. Indeed, the fast-food mode of operation lent itself to resilience in a period with limited face-to-face interactions. Fast-food restaurants could still operate the drive-thru while also offering a quick experience through delivery apps.
Grand View Research recently valued the global fast-food market at US$595 billion in 2021. The same report projected that this market is set to deliver a compound annual growth rate (CAGR) of 5% from 2022 through to 2029. Fortune Business Insights also projects that the global fast-food market will achieve a CAGR of 6% from 2021 through to 2028, capping out at US$1.46 trillion at the end of the forecast period.
McDonald’s (NYSE:MCD) remains a global powerhouse in the fast-food industry. In the second quarter (Q2) of fiscal 2023, this company reported global comparable sales growth of 11%, which United States sales posting 10% growth. Moreover, it delivered consolidated revenue growth of 14%.
Starbucks (NASDAQ:SBUX) may not be the first name that sprouts to mind when you think of fast food, but don’t be fooled. This company is a dominant player in this space, capitalizing on its brand to a worldwide consumer base. In Q3 2023, Starbucks achieved global comparable store sales growth of 10%. Non-GAAP earnings per share (EPS) increased 19% to $1.00.