Fast-Food Chains, Just Like Republicans, Are Caught Between A Rock And A Hard Place

LOS ANGELES , December 10, 2014 () – For a while now, I’ve associated the U.S. fast-food industry with the Republican Party. Republicans are often caught between a rock and a hard place these days in terms of major elections: They can’t win without their base, but attempts to appeal to independents often run the risk of alienating that base. And sooner or later, they need to solve that riddle because that base is getting older.

Fast-food chains are in a similar conundrum. They still need their core customers, but that core is getting older and the next group of potential customers—millennials—are not nearly as interested in Big Macs and Burrito Supremes. They want better-for-you food with healthier, fresher, more organic ingredients, and they’re willing to pay a little bit more as long as they can get the food at a fast-casual pace.

And therein lies the problem: The items that fast-food chains are coming up with to entice millennials are generally not nearly as appealing to its core base. But that core isn’t going to be around forever and you need to start pushing for that new cache of customers.

Rock, meet hard place.

McDonald’s epitomizes this issue. Its U.S. sales have been stagnating as more customers in their 20s and 30s deflect places like Chipotle and Smashburger. So it’s added several menu items like oatmeal, lattes and snack wraps in recent years to appeal to a wider range of customers. The problems? These items don’t appeal to core customers and service slows down. Its McCafé drinks, for example, require a separate station behind the counter equipped with coffee grinders and blenders, causing longer waits. And when fast food has slow service, that’s a bad combo.

Fast food needs millennials. Maybe not now, but down the line. But the bridge between new customers and old customers still needs to be built.

Nevin Barich is the Food and Beverage Analyst for Industry Intelligence. Email him here or follow him on Twitter here.

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