Fast Food Surprises

Some Chipotle fans take a scale to lunch. No, not to weigh themselves. They need a scale for their Burritos. Expecting a full four ounces of beef, some diners claim they were shorted. To confirm, one YouTuber, after weighing 15 burritos at three different locations confirmed the skimping–but mainly for online orders. Another diner calculated that in-person orders were 16.48% bigger. Responding, Chipotle says it is investigating. Meanwhile, workers should “err on the side of generosity.”

As a restaurant that calls itself either fast food or fast casual, Chipotle has lots of competition.

Fast Food Competition

If our metric is average revenue per restaurant unit, then Chick-fil-A is #1. At $8.5 million, each of its outlets brings in more than twice a typical McDonald’s. However, since Chick-fil-A has 10,905 fewer units than McDonald’s, the chain’s revenue is far smaller:

Or we can return to QSR’s statistics to see different ranking possibilities:

But to see the real fast food surprises, we can look at our local burger alternatives. The choice is humongous. Ten years ago Thrillist based the following map on 20,000,000 Foursquare check-ins. The data let them identify the brands that dominated each county. And, unexpectedly, it was not McDonald’s: Yes, it is outdated, but still it gives us a better picture of the burger fast food landscape:

Our Bottom Line: Monopolistic Competition

Concerned with competition, Chipotle wants to be sure its Burrito Bowl has sufficient meat. Indeed, telling us what is special about their Bowl is precisely what Chipotle, and all others with a similar product have to do. Each chain has to differentiate its menu from everyone else’s.

In a monopolistically competitive market, it all makes sense.

Monopolistic competition is composed of two halves. The monopoly part indicates the company is producing something unique that you associate solely with it. But the competition half says that lots of others have something that could be identical or very similar. A beauty salon is the perfect example. You can get a haircut at many hundreds of shops. But the one person who does your hair is what makes the place unique.

Because we can say the same thing for a burrito and a burger, you can see why the chains care about you, me, and the competition. Each is trying to distinguish its identity from all the others.

In the four basic market structures, monopolistic competition is located to the left on the scale. Its position indicates less price and non-price power than those firms located to the right. For monopolistic competition, businesses tend to be smaller and the market is their boss:

But what is the surprise? It ranges from the amount of beef in a Chipotle burrito bowl to a state map that minimizes McDonald’s presence.

My sources and more: It’s always a delight when two separate articles converge. This week, WSJ and Chartr created that synergy. Then, there was more at QSR, always a handy destination for fast food data.

Please note that our featured image is from QSR. Also, several of today’s sentences were in a previous econlife post.