Since the book Freakonomics came out a number of dilemmas and questions have been answered. Unfortunate for some it discovered cheating scandals and how drug dealers and other nefarious individuals hide assets. Well Chatham has a question that Freakonomics can answer. The fried chicken dilemma, how fried chicken stymied economic development in our community.
Several years ago, many of the large chains began to come out with $1 value products as a way to get customers back into their stores and restaurants did it better than anyone else. The largest fried chicken chains began a pricing war that offered customers a deal almost everyday of the week. Kemtucky Fried Chicken(KFC) on Monday, Church’s on Tuesday, Popeye’s on Wednesday, and so on. These daily dollar specials lasted for quite a while and several regional chains got involved as well. Harold’s Fried Chicken ad Brown’s Fried Chicken got into the fray as well. Eventually, KFC, Popeyes, Brown’s and Harold’s raised the white flag and offered deals but got away from the $1 deals. This left Church’s as the winner of the pricing war or it appeared that way.
Church’s has had a long and sometimes rocky past with the Southside of Chicago. They reached out to African Americans to become franchise owners on a positive note but they became the subject of an Urban Legend after that and this legend still keeps some African American customers away. Overall, the stores are nothing special, poor customer service, average product and angry customers. What keeps customers coming back? Tuesday’s $.99 special, the lines are out the door, customers are angry and can get down right nasty and the staff has a nonchalant attitude. They tried to let the special go and customers did a mass exodus from the store and forced Church’s to bring it back.
While it sounds like a win for consumers and a win for the business, it has become a loss for the Chatham community. The Brown’s store has closed as they couldn’t compete, several restaurant entrepreneurs have reported that they are having difficulty obtaining financing from financial institutions because the financial institutions do not see the community supporting a fast casual restaurant because they all they see is the $.99 deal continue and it is rumored that Whole Foods passed on Chatham because of the $.99 deal and several other issues.
So the $1 deal looks good for both business and the consumers but its been bad for community economic development. Sometimes cheaper is not always good. Maybe the Freakonomics team can give us some insight on this dilemma that can be used to stimulate economic development.