Originally Posted by
HIDDY
In my town of about 70000 souls there is no McDonalds and I don't understand why. In the UK a town of comparable size would have at least one if not two branches.
The kids who go off to BA or La Plata to university come back and rave about big macs and fries so it's not as if it isn't popular among the young.
This is a very interesting point.... and one which Ive been looking into for a while now. My preliminary conclusion is that this is an issue of expensive logistics combined with a problem of economies of scale.
a) Logistics in Argentina is very expensive... mostly because the overall economy is relatively small, so there are very few large frozen food logistics providers and prices are high.
b) McDonalds would need to truck in everything they need for their stores, except for labor (which could be sourced locally).
c) Argentina does not have economies of scale in the fast food industry and also in frozen foods in general. In many G7 nations, the market penetration of fast foods & frozen foods is such that in a town of 70K, apart from 2 McDonalds and a few other large chains, you would have various mom & pop eateries that would use a lot of frozen foods.... that does not happen in Argentina. This makes it hard for suppliers to attain the economies of scale that are needed to keep prices in check.