Company Analysis: A&W Canada
A&W is a fast food restaurant that is world famous not only for its food product, but mainly for its original beverage; the A&W root beer.
In 1919, a man by the name of Roy Allen decided to set up a drink stand at a parade, which was honoring World War I veterans returning home to Lodi, California. He offered a new product called root beer. The creamy beverage was a great success; so much that he took on a business partner by the name of Frank Wright. In 1922 Allen and Wright with initials combined, created a brand for the beverage calling it the A&W Root Beer. ("History of A&W Root Beer," 2014 Paragraph 2).
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("The A&W Multi-Site Franchise Opportunity," 2013 Paragraph 1).
Within the last Three years A&W has had a very successful growth pattern according to the company’s annual reports.
In 2011, an increase in sales resulted in total system sales of 3.8%, reaching $825 million, and a total of 25 new restaurants were opened in the year of 2011 as well. 10 Out of the 25 new restaurant locations opened in Ontario, which is an important and developing growth market for A&W. In addition, A&W introduced their new “Urban A&W concept” which showed success as 11 of these updated restaurants, were in full operation in the high traffic urban areas. (Paul F.B. Hollands, 2011, Page 5, Paragraph 1, 2, 5).
In 2012, an increase in sales resulted in total system sales of $850,626,000, a 3.2% increase from the previous 2011 sales. In 2012, A&W was able to open 31 new restaurants and though a total of 7 locations closed down, at the end of 2012 there were 773 A&W restaurants in Canada, compared to the 749 locations at the end of 2011. In addition, over half of the new locations that opened in 2012 were located in Ontario; the developing growth market for A&W. In regards to the growth and development, 84 restaurants were also updated with A&W’s new urban concept, bringing the total number of restaurants operating with the new design to 228. (Paul F.B. Hollands, 2012, Page 5, Paragraph 3, 5, 8).
In 2013, an increase in sales resulted in total system sales of $891,343,000, a 4.8% increase from the previous 2012 sales. In 2013, A&W opened a total of 37 new restaurants and out of the 37 locations, 36 were located in two important growth markets for the company; Ontario and Quebec. In addition, by the end of 2013 A&W was able to celebrate its opening of the 800th restaurant location in Canada, and over 350 restaurants reflected the company’s new “urban concept” design. (Paul F. B. Hollands, 2013, Page 4, Paragraph 5, 6, 8).
The following chart outlines two customer segments for A&W restaurants:
| The Health Conscious Fast Food Consumer | The Time Consumed Consumer |
Demographic | * Age 25+ * Educated * Single, Married, Parent, Student * Male or Female | * Age 18-50 * Employed, Student * Single, Married * Parent, * Male or Female |
Geographic | * Canada * Urban areas * Rural areas | * Canada * Urban areas |
Psychographic | * Aware of health risks * Concerned about steroid use in animals * Concerned about Hormone use in animals | * Independent * Busy * Little time for self * Caretaker of others * Dual income household |
Behavioural | * Research food sources * Seeking healthier fast food consumption * Examine nutritional Information * Active Lifestyle | * Long/Early work commute * Long/Early school commute * Rushing * On the go * No time to prepare meals * Seeking quick and easy meals |
The primary segment...