Looks like it's tough all around for Fast Food restaurants the longer the recession goes on.

At first, bad economic times meant relatively good news for fast food chains such as McDonald's (MCD) and Burger King (BKC), while cash-poor consumers traded down from more expensive dining fare. Now, as the U.S. unemployment rate remains uncomfortably high, chains are struggling to keep Americans eating out at all.

"We have a price war going on," says Morningstar (MORN) analyst R.J. Hottovy. Burger King, McDonald's, and Wendy's (WEN)—which also owns the Arby's chain—are scrambling to offer special promotions and introduce new products.

At McDonald's: Winning a Hard-Times, Fast Food Fight - BusinessWeek

Labels: fast food