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A newly built McDonald's location in Toronto has many much of the new styles and format, with modern style seating, designs on the walls, flat screen televisions and a fireplace. (Deborah Baic/The Globe and Mail/Deborah Baic/The Globe and Mail)
A newly built McDonald's location in Toronto has many much of the new styles and format, with modern style seating, designs on the walls, flat screen televisions and a fireplace. (Deborah Baic/The Globe and Mail/Deborah Baic/The Globe and Mail)

How fancy can fast food get? Add to ...

Does fast food taste better when it's served on a china plate?

Big-name quick-service chains such as McDonald's, A&W, Burger King and Wendy's have slowly been gussying up their image over the past few years, revamping their stores and introducing premium menu items to give fast food a sheen of sophistication.

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Lately, their upscale push is blurring the line between fast food and casual dining. Adjectives such as "natural," "artisan" and "specialty" are being applied to French fries and sandwiches . China and flatware are replacing cardboard cartons and plastic utensils. And soft designer lighting is taking the place of a harsh, fluorescent glare.

Several recently revamped McDonald's in Toronto and Vancouver, which serve as models of the company's next phase of an extensive makeover, even featureflat-screen televisions and fireplaces.

"It's really a dramatic makeover from your dad's McDonald's," company spokesman Louis Payette says. "It's kind of forced people to change the way they look at our brand."

Long associated with cut-rate prices and widening waistlines, fast-food restaurants traditionally rank at the bottom of the culinary food chain. But thanks to increasing competition from the slightly more upscale fast-casual segment (think Chipotle Mexican Grill and Panera Bread), fast-food giants are upping the ante to secure a greater market share. The question is, how fancy can fast food get?

Fast-food chains fared well during the recession, luring bargain-seeking customers with $1 menus. But as consumers shifted down-market in the uncertain economy, the fast-casual segment, characterized by sit-down meals made to order and a slightly higher price point, also grew stronger, according to Darren Tristano, executive vice-president of Chicago-based market research firm Technomic Inc.

In the U.S., sales in the fast-casual segment - which has a price point of about $7 to $10 a meal versus fast food's $5 to $7 - has grown to about $20-billion (U.S.) a year, or roughly 10 per cent of the total limited-service market, Mr. Tristano says.

The competition has prompted fast-food chains in the U.S., Canada and beyond to alter their strategy. Besides the difference in price, quick-service restaurants generally have drive-through service, while fast-casual is slightly more sophisticated, less "grab-and-go," and generally means dining in. (Casual dining, yet another notch above on the restaurant hierarchy, is usually characterized by full table service.)

"It has forced restaurant chains in fast food to raise the bar in a number of ways," Mr. Tristano says.

In November, Wendy's replaced its French fry formula for the first time in 41 years in favour of a new "natural-cut" fry, seasoned with sea salt, aiming to appeal to customers who want more natural, high-quality food. Last month, the Ohio-based chain announced that it would expand on that strategy by rolling out an Artisan Egg Sandwich made with Hollandaise sauce,a chicken club sandwich made with aged asiago cheese and thick-cut applewood smoked bacon, and a premium burger line in the U.S.

Burger King, which tested the gourmet waters in 2008 with a nearly $200 wagyu burger in Britain, has since been expanding its Whopper Bar concept in the U.S., and to Singapore, Venezuela and Spain. Billed as a "unique dining experience for the Whopper connoisseur," the select locations offer a more modern environment and premium burgers with toppings such as guacamole, bourbon-flavoured sauce and "Bleu Cheese Crumble." (Adding to its bar-like vibe, the South Beach, Miami, location also serves beer.)

Meanwhile, McDonald's is planning to spend $2.4-billion (U.S.) on a global makeover of hundreds of its restaurants, according to Fast Company magazine. Over the past three to four years, more than 550 of the 1,430 McDonald's stores in Canada have already been outfitted with a more sophisticated look, and Mr. Payette says further enhancements are to come.

Contributing to the trend, A&W last month expanded its new "urban concept" revamp to Toronto, with the opening of a store in the city's downtown core. Like their urban concept counterparts in Vancouver and Calgary, staff at the Toronto location plate Spicy Chipotle Chicken Sandwiches on ciabatta buns on china, and serve Chicken Caesar Salads accompanied with stainless-steel cutlery. Fries come in quaint wire baskets - a presentation similar to what one might find at a casual steakhouse.

Even Krispy Kreme is jumping on the bandwagon. At its new downtown Toronto "neighbourhood café style" store, which opened in November, the doughnut chain has rolled out espresso drinks.

According to Rob Fussey, director of A&W's urban concept development, diners continue to seek convenience, but they now demand a "real restaurant" experience. "When people have an opportunity to have a dining experience, they're really looking and saying, 'Oh, I want to invest in that experience and it needs to feel like a real restaurant experience,' " Mr. Fussey says.

So far, the more sophisticated approach to fast food is working, says Linda Strachan, a Toronto-based restaurant-industry analyst for the NPD Group market research firm.

The Canadian Restaurant and Food Services Association projects that quick-service restaurant sales grew to $21.3-billion in 2010 based on data from the first 11 months of the year. From January to November last year, those sales grew 6.1 per cent over the same period in 2009, nearly double the rate of total industry sales, which grew 3.8 per cent.

Instead of doing away with value menus and discount items altogether, Ms. Strachan says, quick-service chains have adopted a sort of "bell-bar strategy," continuing to offer low-cost items on one hand and ramping up the upscale items on the other. Not only has the latter move successfully blunted the threat of expansion of U.S. fast-casual chains into Canada, it has also allowed quick-service restaurants to steal some business from the higher-end casual dining segment by appealing to discerning diners, she says. "For example, Wendy's natural-cut sea salt fries, it's got all the sort of local-flavour, foodie kind of hot buttons to it."

But fast food's cheap and fatty reputation isn't easy to shake. And Mr. Tristano says it's doubtful that these fancy flourishes will win over gourmets. "I don't think there's a chance that foodies are going to come in, just because of a different descriptor."

Even with the introduction of specialty menu items touted as healthier or more natural, he says, consumers will continue to gravitate toward salt, fat and lower prices.

"Take the McDonald's Angus burger, for example," he says. "There will be those people whose perception is that Angus is better; it's worth the price. But, in the long run, leaner meats with less fat don't taste as good. So, all of a sudden, you're paying more for something that is healthier and better for you, but doesn't taste as good."

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