Supply and Demand
December 19, 2019
On August 12, Popeyes tweeted a mouthwatering snapshot of a new limited-edition menu item: “Chicken. Brioche. Pickles. New. Sandwich.” “I need this in my life,” replied one person. “My. Mouth. Is. Salivating,” wrote another.
Many thousands of likes and retweets later, business was booming. The sandwich “became famous,” says restaurant consultant Aaron Allen. People were lining up to get it, and it soon sold out—making this a perfect case study for supply and demand.
Sandwich in Demand
To understand how this buttermilk fried-chicken sandwich became a “thing,” you need to know a bit about economics. Economics is the study of how people use limited resources, such as money and time. The relationship of supply to demand is a key economics concept. Supply is the amount there is of something, such as a product. Demand is how much people want it.
When there’s more supply than demand, prices go down. When there’s more demand than supply, prices go up. And supply and demand don’t stay constant . They’re affected by factors such as weather. Demand for air conditioners is high in summer. Why? It’s hotter!
Demand can also be affected by popularity and people’s taste. That’s what happened at Popeyes.
The restaurant opened in 1972. It didn’t always have a chicken sandwich. Like KFC and similar franchises , it specialized in selling pieces of chicken. Popeyes started developing a sandwich about two years ago, after noticing increased demand at competitors such as Chick-fil-A.
Unfortunately, Popeyes underestimated how great the demand for this particular chicken sandwich would be. Before launching it, Popeyes purchased what it thought was enough ingredients to make sandwiches through the end of September. The sandwich sold out before the end of August.
How could that happen? Allen says it’s a result of the “bandwagon effect.” That’s when people want things simply because other people have them. He also noted that people are drawn to limited-edition items. If they think there’s only a certain amount of a product or that they have to buy it before time runs out, they’ll want it more. That can be true even if the product isn’t as great as the excitement seems to be.
What Happens Next?
Popeyes restocked and started selling the sandwich again at the start of November. Research shows the lines were longer for its return than they were for its launch. Binay Kumar, the manager and partial-owner of a Popeyes location in New York City, said it was still selling more than 700 sandwiches per day in mid-December.
So what happens now? The same thing that happens whenever an item gets super hot: More companies look to make money from it. McDonald’s, for one, is testing a fried-chicken sandwich of its own in Tennessee and Texas. Will it generate the same level of interest? Allen expects everyone will want to try it. As for Popeyes, there are plenty of sandwiches to go around now. You just might have to wait in line to get your hands on one.
—By Rebecca Cohen
Popeyes debuted its fried-chicken sandwich on August 12. Two weeks later, it was sold out at locations across the country. Some places—such as one in Greenville, Texas, shown here—put a “Sold out!” sign on their drive-thru. The sandwich was in such demand that someone tried to sell one for $1,000 on the website eBay. That’s an expensive sandwich!
TALK ABOUT IT Why do you think the Popeyes chicken sandwich was so popular? What factors made demand for the sandwich so high? Discuss with your family. Ask if they can remember other products that were in high demand.
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