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German fast food goes upmarket

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08:21 CEST+02:00
Fast food giants McDonald's and Burger King are losing out to posh burger outlets and fancier bakery snack shops, as Germans demand better quality fast food.

Things are not looking so great for the fast food industry's giants in Germany. McDonald’s is faltering and Burger King is suffering from a hygiene scandal. Competition is harder than ever for the top two fast food chains, as pizza delivery services, bakery outlets and posh burger joints launch aggressive strategies to catch up with the fast food kingpins.

For years, McDonald’s and Burger King have dominated the market in Germany. Put together the two US giants have a higher turnover than the next 30 largest competitors. But since 2013, McDonald’s customer number has sunk for the first time in years.

Burger King too has suffered a huge set back as a result of a TV report on RTL showing breaches of hygiene and poor working conditions.

While McDonald’s started stalling in 2013, pizza delivery service Joey's Pizza went full speed ahead. In 2013, the Hamburg-based company increased the number of outlets to over 200, causing their turnover to rise 6.6 percent to €128 million.

That should be of little significance to the McDonald’s, which according to the industry journal “Food Service” has a turnover of over €3 billion.

But Joey's is not alone, Call a Pizza, Smiley and many more pizza delivery services are proving extremely popular with customers. Even US pizza delivery giant Dominos is now up and running in Germany.

However, the fast food war is not only a pizza fight. An increasing amount of bakeries are stepping in with snack shops aimed at lunchtime customers, including the large chains like Backwerk and Back Factory.

“We're following the trend of turning self-service bakeries into a place to come and eat,” said Backwerk's managing director Dirk Schneider. The sales for filled rolls, snacks and drinks already account for more than a third of Backwerk's turnover.

Gourmet hamburger joints such as Ritchie 'n Rose in Düsseldorf or the small chain Hans-im-Glück have also jumped on the bandwagon in a bid to knock the burger giants off the top. More expensive than McDonald’s and Burger King, their “gourmet burgers” are aimed at the more sophisticated palate.

“People are happy to pay a euro more for a burger of much higher quality”, said Richard Nicolaus from Richie 'n Rose, which opened last year. On the menu you will find the classic cheeseburger and fishburger alongside marinated tuna steak or chicken burger with teriyaki sauce.

The small burger chain has outlets in several German cities and offers healthy alternatives to the US chain, from fancy vegetarian burgers such as the “Wuzelsepp” a walnut burger, with Heumilchkäse (cheese produced from hay-eating cows), nuts and sprouts to the “classic” beefburger with the choice of Parma ham, goats cheese and fig jelly, or brie with cranberries.

In comparison to their rivals, Hans im Glück provides table service for their customers and “offer a better made burger”, said the company's managing director Thomas Hirschberger. In addition to gourmet burgers, the newcomer, which has 19 outlets in Germany and plans to have 55 restaurants by 2015, also offers cocktails, beer and wine.

But Hirschberger predicts a long-term future for McDonald’s and Burger King in Germany. “They do a good job,” Hirschberger said. “They always bounce back.”

SEE ALSO: Burger King boss admits scandal has hit revenues

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