With the population of millennials officially surpassing baby boomers as the largest generation in the US (according to the most recent US census), seemingly every business is rethinking the way it attracts and interacts with this younger generation. The fast food industry in particular is having a whopper of a time (pun intended) changing the way it does business.
According to data compiled by the RBC and NPD group via Forbes, millennials have cut back on annual restaurant visits by over 21% in the past 7 years. They also note that traditional fast food companies, such as McDonald’s and Burger King, have specifically seen a decline in visits from the millennial crew. So when millennials are choosing to grab a quick bite, where do they go?
Looking at our millennial panelist data -- anyone born after 1981 -- there is a clear shift in patronage to the fast casual sector (represented by Chipotle and Panera Bread) and away from the traditional fast food industry (represented by McDonald’s and Burger King.) While millennials account for more than half of fast casual transactions (53% for Chipotle, 52% for Panera), older generations dominate at the traditional fast food restaurants: millennials are just 45% and 44% of traffic at McDonald’s and Burger King, respectively.
We know that the millennial generation places emphasis on quality ingredients and authentic brands and it seems that they are aligning their spend with their values. It will be interesting to see how the fast food industry will start to shift its strategy to accommodate for these values and compete with the rising fast casual sector.
Behind The Data:
We bucketed TXN panelists into millennial and non-millennial consumers, based on birth year. We then looked at the last 6 months of panelist data to determine the dining spend behavior of those various age groups.
Learn more about consumer spending analytics with TXN.