Are Americans Finally Giving Up Fast Food?

Is this the end of McDonalds?

Are Americans all done with McDonald's?. Quartzla

My local McDonald's Franchise is currently undergoing a complete renovation – meaning it is closed for the better part of the summer.  No one here is really complaining, though.  With several other restaurant options available, plus grocery stores stocked with tasty and healthy convenience food options, the lack of Mickey D’s is not as acutely felt as it might have been twenty years ago.  Which got me to thinking, is my little mountain town a microcosm of a much bigger problem for McDonald and the fast food industry as a whole?

  Are Americans finally over burgers and fries?

McDonald’s is The Biggest Loser

According to the 2015 American Customer Satisfaction Index’s Annual Restaurant Survey, McDonalds ranks lowest in customer satisfaction for the fast food restaurant segment, with a score of 67 out of 100.  Burger chains as a whole fell with Burger King at 72 at Wendy’s at 73 – ranking below fast casual and pizza chains, begging the question – are the tried and true restaurant franchises like McDonalds, just old and tired? McDonalds has posted losses in the United States for six straight quarters, despite efforts to maintain is relevancy with healthier menu options and upscale coffees.  But consumers don’t seem to be all that interested. 

Fierce Fast Food Competition

One of the reasons for McDonald’s lackluster sales is the increase in competition.  It isn’t just the old fast food burger joints competing for consumer’s money – Fast Casual brands like Panera Bread, Chipotle and Shake Shack.

  By definition a fast casual restaurant offers the ease and convenience of fast food, but with a more inviting sit-down atmosphere. Typical fast casual restaurant menus feature higher quality ingredients than those found at older burger franchises.  Customers order off a menu board, just like at McDonalds or Burger King, then sit down and enjoy their meal in a leisurely fashion, similar to dining at Olive Garden or 99 Restaurant.

Or they can carry-out, for off-site lunches and catering.    

International Snafus

Shifting consumer tastes may be the cause of lower sales in the United States, but some major health mishaps have not helped McDonald’s image either. According to the article Why McDonald’s sales are falling by the Economist, sales in China dropped after it was discovered that some outlets were using contaminated and expired meat, while in Japan there were customer reports of finding plastic bits in meals. 

Can Fast Food Win Over the Millennial?

As the largest demographic in the United States the Millennial generation will soon have more buying power than the Baby Boomers.  For those born between 1980 and the early 2000s, McDonalds and company are old brands – they are not new or exciting. While Millennial care about the environment, local food and general society good, they also love a good bargain. According to Marketing to Millennials: Deciphering the Enigma Generation, 35 % of Millennial would compromise their values (a little bit) to save some money. But Millennial aren’t cheap. They expect good, healthy food at reasonable prices. This is a distinctive change from the super-sized, all-you-can-eat sales tactics of the 1990's and early 2000's fast food industry.

  Moving forward, will MDonald’s and Burger King and other older chains be able to update their brand to appeal to Millennial, without losing their brand indentity?

 Is It All Over for McDonalds?

Though US sales have been slack over the past 18 months, globally, McDonalds is still powerful force in the restaurant industry and that isn’t likely to abate any time soon.  With 35,000 outlets worldwide, McDonalds is still world’s largest restaurant franchise. In recent news the company has vowed to “…be a true destination of choice around the world and reassert McDonald’s as a modern progressive burger company.”