tional Restaurant Association (NRA), fast-
food restaurants have enjoyed rapid growth.
In fact, from 1970 to 1990, sales in these
limited-menu restaurants have increased at an
estimated 12.9 percent compound rate, com-
pared with 7.9 percent for the remainder of
the U.S. food service industry.
The success of the fast-food industry, a rel-
atively mature, highly competitive business,
is believed to be the result of changing demo-
graphics and lifestyles. Over the past several
decades, more Americans have been turning
to restaurants for their meals. Dual-income
families made the option of dining out a
necessity because of the families’ lack of spare
time. At the same time, additional income
made dining out more affordable. The fast-
food industry has also managed to sell its
customers on the value and convenience their
products and services offer. This perception
has been enhanced by the addition of drive-
through windows, which enable customers
to order and be served in their cars.
Restaurants have further catered to cus-
tomers’ idea of convenience by adding deliv-
ery to the current list of services offered.
Despite these positive indicators, Rubio’s
faced several challenges at that time. The rel-
atively weaker economy of 1991 and 1992
led to higher unemployment and an increase
in meals prepared and consumed in the
home. The fast-food industry was also threat-
ened by several other factors, including envi-
ronmental pressures, increased nutritional
awareness, the AIDS scare, and governmen-
tal legislation. As a player in the fast-food
industry, Rubio’s monitored the arena in
which it participated and responded to the
following opportunities and challenges.
Changing Demographics
Aging Population. The United States is
simultaneously experiencing a rise in life
expectancy and a decline in the number of
people ages 15 to 34. The net effect of these
trends is an aging U.S. population. This
change in demographics is likely to have a
significant impact on the fast-food industry.
First, as the population of consumers grows
older, it is likely their tastes will shift toward
midscale restaurants and away from the fast-
food industry. In fact, according to a 1988
study conducted by the NRA, customers
ages 18 to 24 eat out at fast-food restaurants
79 percent of the time; individuals ages 45 to
54 eat out at fast-food restaurants only 60
percent of the time. The difference between
these age groups is allegedly the result of
older patrons’ higher disposable income and
their desire for additional amenities.The Baby Boomers. The second impact of
the changing demographics results from the
rise in birth rates. Although double-income
families have less time for food preparation,
baby boomers started having families of
their own by the early 1970s. As a result,
there are more households with small chil-
dren who are less likely to dine out. Instead,
these families are utilizing such conveniences
as microwaves and take-out and delivery
services.The Decline in Teenagers. Finally, the
decline in the birth rate in the early 1970s
has resulted in a decrease in the number of
youths between the ages of 16 and 20. The
fast-food segment of the restaurant industry
has traditionally relied on this category of
individuals as its main source of labor. As a
result, fast-food restaurants have had a hard-
er time attracting and retaining employees.
This has, to a degree, been alleviated by the
vast amount of unemployment resulting
from the 1991-1992 recession. However,
the overall change in demographics is forc-
ing the fast-food industry to adjust accord-
ingly.
Nutritional Concerns
In addition to the changes associated with an
aging population, the fast-food industry
must also respond to changes in customers’
needs and concerns. Baby boomers are
becoming preoccupied with healthier eating,
and fast-food restaurants are responding
accordingly. Individuals are now concerned
not only with value and convenience, butRubio’s: Home of the Fish Taco (A) 443