Adapting in the Wake of the Fast Food Crisis

By: Gina Lee De Freitas

Making your food fast used to be enough to build a loyal client base, but today's generations need that concept combined with quality and a great restaurant experience.

The fast food business model, created decades ago with baby boomers in mind, has failed to keep up with the changing landscape and isn’t meeting millennial demands. The fact of the matter is, the younger generations are looking for something completely different than traditional fast food spots to spend their dining dollars.

Even large table-service chains are dealing with the millennial mindset – they’re trying to find something unique amongst the carbon-copy restaurants that make their homes in strip malls and along busy thoroughfares.

Restaurants need to consider that no one today is posting a photo of their value meal on Instagram or SnapChatting it to their friends and that no one wants to go where their parents go, and "parents," both young and old, go to McDonalds, Chili's, Applebee's, and even Taco Bell. 

The Fast Food Apocalypse

In November 2012, McDonalds suffered its first sales decline in nearly a decade, and in the last three years, they’ve lost nearly $5 billion in market share. Despite this, McDonalds isn’t going away – they still made $22.8 billion in 2017, but when a giant like McDonalds cannot keep pace and sees decline, their competitors better take heed.

An article from financial site, Clark.com, titled "Restaurant Apocalypse" reported 600+ restaurant closures in 2018 to date. Subway, alone, makes up most of that figure. In 2016, they closed 359 spots and are slated to close 500 more this year. IHOP and Applebee's are other huge casualties in 2018, and in recent years, Starbucks, KFC, Quiznos, Arby's, Sbarro, Long John Silver's, and Burger King are among many that have closed stores en masse.

There are many reasons behind these declines. First, the youngest generations do a lot of cooking at home or they order delivery. Furthermore, when they do leave their home for a bite, they want their "food served fast," but they don't want "fast food."

What the new customer wants is minimal hype instead of fancy table service, but they still want food options that are high quality, healthy, and unique. This is why small chains and independent counter-service establishments with tasty, innovative food are now all-the-rage.

Another issue is that, for many years, fast food chains survived through the use of inexpensive teenage employees. But now there is a decline of teens in the workforce; they are less inclined to put on the silly hat or hairnet for minimum wage. Therefore, adults who need more higher wages, comprise the fast food work force, which drains the revenue from these restaurants.

In addition, there are expensive remodels, menu changes, and clever advertisements that must be done by fast food joints to even stay a little bit relevant to younger generations.

Finding Ways to Compete in this New Environment

Here are some ideas for restaurants of all sizes to be competitive and relative in today's consumer environment:

  • Food delivery is critical: Soon, 25 percent of all restaurant orders will be home delivery, so it is importnat to have a delivery system that is easy, fast, and even fun. And, of course, the food must be warm and delicious. Companies need to find signature methods for creating or delivering food that are memorable and shareable on social media.
  • Become part of the community: Send food trucks into neighborhoods and parks to advertise new options and be relevant.
  • Embrace originality: Include unique choices on the menu that match the local cultural or ethnic surroundings. If a city is rich with history, whether it's a town on the ocean like San Diego or Cajun and Creole influenced New Orleans, you should incorporate those elements.
  • Keep it fresh: Show the consumer that your food is fresh, even if it takes longer, and source locally, to show integrity. Fast food places like In-N-Out Burger, which often experience lines out the door, have an open view to employees cutting fries and grabbing beef that is not frozen.
  • Healthier choices: Provide more nuanced veggies that really show you care about fresh and healthy ingredients. Young foodies want more plant-based options that fit in an all-encompassing healthy lifestyle, that means salads in plastic containers with packaged dressing won’t cut it.

Restaurants need to find a niche that appeals to the growing foodie culture and “millennial experience," which is hard (but not impossible) to find at fast food restaurants and big table-service chains. It is important to be unique and consistently innovate in order to stay relevant. Or, almost certainly, fall to the wayside.

About Butts in Seats!

When it comes to restaurant trends and marketing, IMM knows what they are talking about. Gina Lee De Freiitas, President of IMM, and Corien de Jong, SVP Executive Creative Director, have more than 25 years of experience in the vertical. So when they talk about the tools, tips and resources your restaurant needs to succeed, rest assured they’ve got it covered.

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