Is inequality worsening? The decline of fast food suggests otherwise: Peter Nowak

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Photo credit: Getty Images

Photo credit: Getty Images

I was walking through the Eaton Centre the other day and couldn’t help but notice how much things have changed over the past few years when it comes to eating options. A new Richtree Natural Market restaurant recently opened in place of an old fast-food court at the southern end of the downtown Toronto shopping mall. That follows the $48 million refurbishment of the northern food court in 2011. In both cases, the respective options have moved decidedly upmarket. While the northern court still houses the likes of A&W and KFC, it also has a number of fancier eateries including gourmet burger and vegan options, while all customers get real plates, glasses and cutlery. Judging from the constant throngs that mob both areas, it’s safe to say that shoppers are generally spending more time and money eating at the mall.

This relates to a story recently sent my way on the “slow death of the microwave.” The author starts his thesis on shaky ground – that microwave sales have fallen 40% since their peak in 2004, and that this means people are eating better – but I’ll be damned if he doesn’t make a compelling case by the end of it.

The plateauing of microwave sales could be readily explained by the simple fact that it’s a mature technology. As with all such gadgets and devices, once everyone has one they don’t usually need another one for a while – and indeed, north of 90% of households do have one. But the most telling statistic to back up the author’s claim is the corresponding flattening or small decline in frozen food sales, which has been happening since 2008 after 60 years of solid growth. That’s like if the current flattening of smartphone sales were to be accompanied by a corresponding drop-off in data usage – it’s not happening because the proliferation of the gadget often leads to the explosion of its usage. Such a strong correlation in microwave food consumption is difficult to ignore.

Meanwhile, over at McDonald’s, things aren’t good. The company – seen as the standard by which the health of the entire fast food industry can be measured – is having a miserable time, recently reporting its fifth straight quarter of disappointing sales. Some of that likely has to do with mismanagement such as the chain’s well-publicized menu bloat, but it can also be seen as another bit of evidence that people truly are starting to eat better. The industry in general has been moving toward so-called “premium” products in response to the fast rise of “gourmet” options, a trend especially prevalent in burgers, which is yet another piece of this puzzle.

Put it all together – malls moving food courts upscale, microwaves falling out of favour, struggling fast-food companies, premium/gourmet trends – and it does look like there is a real move toward better eating in general. And that usually requires two things from people: more time or more money. Whether it’s taking longer to cook meals at home or paying extra for better quality ingredients in a burger, evidence is mounting that people are becoming more willing to devote one or both of those precious resources to the things they literally consume.

Which got me thinking about the many recent stories regarding income disparity and inequality. While it’s true that the base measure of such things – the Gini Co-efficient – has been growing in many developed countries over the past few decades (especially in the United States) and that things like real estate are becoming increasingly unaffordable in many places, it’s not as clear that the majority of people are actually suffering because of the rich getting richer. Indeed, the trends in food seem to be a counter-indicator to that. People don’t spend more time and money on food when either resource is in short supply.

Fast food’s links to income are well documented – the U.S. Center for Disease Control, for one, finds that “the percentage of calories consumed from fast food significantly decreased with increasing income level” for people aged 29 to 39. As such, the decline of McDonald’s may actually be a good news story in disguise. So too might the “death” of the microwave.

One comment on “Is inequality worsening? The decline of fast food suggests otherwise: Peter Nowak

  1. The Gini Coefficient and other measures of inequality measure inequality. When income of bottom 10% goes up by 10% and income of top 10% goes up by 100% inequality increases. The bottom 10% improving their nutrition is good for everyone (themselves’ and businesses) and should be encouraged. The negative consequences of inequality are well documented. Therefore everyone needs to work to decrease inequality.

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