Millennials aren’t ‘lovin’ it’: McDonald’s losing connection with young Americans

A U.S. flag flutters in the wind in front of a sign for a McDonald's restaurant in Los Angeles in this April 4, 2011 file photo. Through bursting bubbles and crashing markets, revenue and profit at America's top companies have expanded smartly over the past 18 years -- nearly tripling in the case of operating income. A Reuters analysis of revenue, operating profit and head count growth at the 100 largest non-bank companies between 1995 and 2013 documents a steady divergence between their ability to generate earnings and the need to hire employees.
MARIO ANZUONI | REUTERS
A U.S. flag flutters in the wind in front of a sign for a McDonald's restaurant in Los Angeles in this April 4, 2011 file photo. Through bursting bubbles and crashing markets, revenue and profit at America's top companies have expanded smartly over the past 18 years -- nearly tripling in the case of operating income. A Reuters analysis of revenue, operating profit and head count growth at the 100 largest non-bank companies between 1995 and 2013 documents a steady divergence between their ability to generate earnings and the need to hire employees.
Posted Aug. 25, 2014, at 9:27 p.m.

McDonald’s Corp. appears to be losing its connection with a key group of Americans: millennials.

The Wall Street Journal on Monday used data to show the changing tastes of some younger Americans. Data compiled for that newspaper by Technomic Inc., a restaurant consultancy, showed that the percentage of people in the U.S. aged 19 to 21 visiting McDonald’s monthly has plunged in recent years. And monthly visits to McDonald’s by those aged 22 to 37 have been flat, according to the story.

Sales at longstanding McDonald’s locations have fallen in eight of the last nine months. Meanwhile, sales have been soaring at Chipotle Mexican Grill, which McDonald’s used to invest in, and pricier burger joints, such as Five Guys, continue to expand. And they’re often packed with millennials.

McDonald’s can point to a number of issues for its falling sales at longstanding locations: There was the extra chilly winter that kept people at home, there has been no big new Monopoly or other major promotional draw, and there have been long wait times at some of its locations.

There is also stepped up competition on a variety of fronts. Yum Brands’ Taco Bell stole attention from the market leader when it launched a new breakfast menu in late March, and Starbucks Corp. has added some new items to its food menu. While Illinois-based McDonald’s has largely shrugged off competitors’ moves in the morning, during spring conversations with analysts and investors, CEO Don Thompson was quick to point out the restaurant cracks its own eggs for its breakfast foods.

The Wall Street Journal’s report on McDonald’s comes after the chain announced on Friday that Jeff Stratton, the president of its U.S. operations, will be replaced in October by a former McDonald’s executive, Mike Andres. And earlier this month, McDonald’s warned that that this year’s sales forecast was at risk to be reduced further, on the heels of issues such as supplier safety concerns in China.

Distributed by MCT Information Services

 

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