Usually Recession-Proof, Fast-Food Chains are Losing Customers

Chicago--McDonald's is not the only fast-food chain experiencing heartburn. Sales have cooled over the summer at burger rivals such as Wendy's, while KFC and Popeyes are selling less fried chicken. The pullback in consumer spending on burgers, fries and other quick meals is catching some fast-food executives off guard, as the summer season is normally the best of times in the industry.

Some chains blame ongoing weakness in the economy for the industry's recent struggles, but another reason is a supersaturated U.S. fast-food arena. Also, the industry's biggest eaters--young males--are increasingly turning to dining alternatives that offer fresh food in a casual setting with only a modest increase in price. Some quick-service chains, such as Taco Bell and Subway, have thrived because of new products and smart marketing.

To draw more penny-pinching consumers, McDonald's Corp. and Burger King Corp., the nation's largest hamburger chains, plan to launch permanent discount menus that feature burgers and other items for a dollar. The discounts will probably force competitors, such as Taco Bell and KFC, to lower prices, analysts said. -Chicago Tribune