When discussing the demographics of the fast food customer, the discussion is usually centered around the problem being in poor neighborhoods, and that restaurants are largely patronized by middle or working class people. However, a recent study conducted by American Express Business Insights found that “ultra-affluent consumers” have increased their spending at fast food establishments by 24 percent in the second quarter of 2020, as compared to the same quarter in 2020.
The definition that American Express uses as “ultra affluent” is definitely unmistakably rich: people who charge over $7,000 a month on their cards.
The trend isn’t a sign of what you might be thinking – that the rich are being frugal because of a tough economy. In fact, the numbers seem to show that they spend a lot on, well, everything. It may actually be a sign of the opposite – the economy is improving.
Sure, the rich may seem to be holding onto their money when you see an increase in spending on business-class plane tickets by 114 percent, but they have also increased spending on cruises, car rentals, and luxury hotels. Plus, besides spending more on fast food, they also spent 12 percent more on what was termed “fine dining.”
“While their spending levels and frequency have rebounded, even the ultra-affluent are value-minded,” says Ed Jay, senior vice president of American Express Business Insights.
As for the rest of us, we also increased our fast food intake, but only by eight percent over the year of the study.
One possible explanation for the increase in American Express use at fast food places is that more of them are accepting the credit card. When you add that to the fact that people tend to spend more using plastic than cash, it’s a recipe for a jolt in the numbers.
Now, here’s where the food industry begins the spin.
According to Darren Tristano, executive vice president of Technomic, a food industry consulting firm “Most restaurants at the fast food level have raised the bar on the quality of their food.”
Wait, it gets better.
Can you imagine rich people irresistibly attracted to the fine-dining that can be had at the local Mickey D’s?
“Lovey, have you heard about the new angus burger at McDonald’s? It’s to die for. Let’s skip on Ruth’s Chris Steak House tonight, and hit the drive-thru.”
Tristano suggests the fast food restaurants place TV ads based on the presumed sophistication (read: rich) of the show’s audience.
“McDonald’s might be advertising its Angus burger when they’re dealing with the sophisticated shows, but the Big Mac when it’s the average consumer,” Tristano says. “The way they approach marketing by price point is a great example of how they’re differentiating.”