In-n-Out has to watch growth, becuase people prefer it to McDonald’s because the food is fresh. You have to stay close to the food supply and forget freezing and shipping.
Megan McArdle writes: We are the heirs of the Industrial Revolution, and, of course, the Industrial Revolution was all about economies of scale. Its efficiencies and advances were made possible by banding people together in larger and larger amalgamations, and we invented all sorts of institutions — from corporations to municipal governments — to do just that.
This process continues to this day. In its heyday, General Motors employed about 500,000 people; Wal-Mart employs more than twice that now. We continue to urbanize, depopulating the Great Plains and repopulating downtowns. Our most successful industry — the technology company — is driven by unprecedented economies of scale that allow a handful of programmers to make squintillions selling some software applications to half the world’s population.
In-n-Outt doesn’t think it can deliver the same level of quality as a far-flung mass-market operation. Not to mention the effect of expanding beyond easy trucking range of top-notch California produce. McDonald’s solved this problem by relying on frozen products machine-prepared to exact written specifications. Which is why so many people prefer In-N-Out to McDonald’s.
