Urbis Think Tank
What effect might calorie labelling have on fast food retailers?
In 2008, New York City introduced a law requiring chain restaurants to post the calorie count of each food in the same size and font as the price. This was extended this year in the US by a Federal law introduced by Barack Obama. And today, a similar British law was introduced. So, what has the impact of these laws been in New York?
According to a study published in the American Journal of Public Health, 64% of customers take note of the calorie information, and 27% say that they use the information in making their menu selection. The study also showed that the energy content of lunchtime purchases in New York City declined significantly at three major fast food chains, but not across the entire sample, and it increased at one chain when large portions were heavily promoted. At a financial level, the US health authorities report that each food outlet will incur around a $1000 cost to comply with these regulations.
So, what might be the implications for Australian fast food properties? Australian health authorities are quite proactive, and it is clear that they would be watching the trials in the US and UK very carefully. The evidence so far is mixed.
There is a strong case that fast food restaurants are responding to these changes by lowering the calorie content of their foods, and adding options to the menus that are lower in calories. Clearly, McDonald’s shift to Healthy Options has been the most obvious example, and has been a commercial success. However, not all fast food outlets have responded to the labelling laws by reducing calories.
This will be a space to watch keenly for fast food operators, and property owners in the food business. There are likely to be regulations coming our way, and as McDonald’s has shown – it’s best to act first rather than to be forced.