Will Millennials Bury McDonald’s?
Published in Hospodářské noviny
(Czech Republic) on 9 October 2014
by Daniel Anýž (link to original)
It may be just an advertising trick, or it may be totally true that the McDonald’s logo, that big yellow M, is a better known symbol worldwide than the cross. It wouldn’t be surprising from a firm that has 35,000 outlets in nearly 120 countries. The McDonald’s brand has also become a symbol of globalization, and the McIndex, the price of a classic McDonald’s hamburger compared to the time it takes a diner to earn the money for it, is even used by professional economists for comparing the purchasing power of various countries’ populations around the world. One could say that the sun never sets on McDonald’s.
But it may have started to go down. In recent months the firm has registered its largest drop in sales in over 10 years. President Putin, who had a Moscow McDonald’s closed for “hygienic” reasons, would like to claim such a victory as his own, but he doesn’t merit it. The July scandal in China, where a local supplier is said to have delivered expired meat, has made a bigger hole in the firm’s global turnover. It influenced sales not only in China, but also in Japan, where the company is expecting a loss for the first time in 14 years.
But these Asian torments aren’t the reason the American media has recently been writing that the most difficult period of McDonald’s existence probably lies ahead. The main danger comes directly from within the U.S., from customers there. Young Americans, namely millennials, are abandoning this fast food.
Hamburgers in Bucharest
But before we return to the millennials in more detail, let me add one personal observation. Between 2001 and 2003, I repeatedly and relatively quickly — in a matter of days — traveled back and forth on the Washington-Prague-Bucharest axis. Sharp cuts left sharp impressions. McDonald’s stores in Washington suburbs were conspicuously empty, and the level of service generally corresponded to the poor clientele. The usual American “How are you today” had changed to a bored “What for you,” and then there were the worn-out floors, the overflowing trash cans. So I quit McDonald’s when the girl behind the cash register, after the usual “What will you have?” sneezed the whole time and wiped her hands on her apron.
In the Czech Republic, McDonald’s were full and one of the best alternatives for a break from driving, for instance. Although part of our society had an aversion (“I’d never set foot in McDonald’s!”), for the majority a visit to McDonald’s was a regular and rather pleasant experience — clean toilets, they don’t overcharge you.
And in Bucharest? How to end a successful week of school? Let’s take the kids to McDonald’s! In the same way, it was a cool place for a gathering of Bucharest high school youth, or a natural choice of where to invite your business partner for a work meeting, or to spend a pleasant moment over French fries for two.
I observed with amazement that in Washington, McDonald’s was a place where only construction site workmen smudged with paint and homeless people with their collected quarters wandered in, whereas in Prague it was a restaurant for middle class clientele, and in Bucharest a chic address where people went for a change, to have fun and to be seen. It occurred to me then what I’ve found in American media now. Worldwide, McDonald’s may still be an image or icon of modern-day America, but on its domestic playing field, it’s nearly the opposite. With every successive generation of American customers, it may become more and more a symbol of the past.
It’s the millennials who have in all probability begun this process. To tell the truth, these clever, digitally educated people are more or less disagreeable to many older Americans. Not just to the oldest, “silent” generation, who grew up with a social order that had a clear purpose, and who now in its old age observes how fast their country has changed. But even the mighty “baby boomers” generation, which emerged during the post-war expansion, has a bit of a problem with the millennials. They are envious of them, and rightly so, because these very boomers, in their youth, challenged American society of the ‘60s to a duel, and then governed America themselves — the last three presidents, Clinton, Bush and Obama, are all boomers. Now they see that their own children are pushing them out of their place in society.
In the language of sociology, the millennials are America’s “youngest adult generation.” They are the most ethnically and racially diverse: 43 percent are non-whites. At the same time, they are politically and culturally the most liberal generation — in the American sense of the word, left-leaning.
In the language of certain American commentators, they are narcissists who send each other selfies and regard their digitally illiterate parents with indulgent contempt. However, they still gladly return to the nest when they learn that making a living in the real world of the last few post-recession years isn’t the least bit simple; not by a long shot does every start-up succeed, and by no means is everyone a Mark Zuckerberg, one of the most famous millennials.
What if we tried to guess what those in the McDonald’s organization have to say about millennials? In private they would likely call them ungrateful brats. Officially, Steve Easterbrook, of McDonald’s top management, recently put it this way for the Wall Street Journal: “The millennial generation has a wider range of choices than any generation before them. They're promiscuous in their brand loyalty. It makes it harder work for all of us to earn the loyalty of the millennial generation.”
The Fading Golden Arches
Mr. Easterbrook was commenting on customer surveys showing that contemporary Americans between 12 and 30 — those millennials who until now have formed the McDonald’s customer base — are now saying farewell to that chain. Rather than passing under the yellow M, this generation would rather detour into other, newer chains with more diverse offerings — Chipotle, Panera Bread, Five Guys, Noodles & Co. — or to an ethnic restaurant, if they don’t favor shopping in bio-food stores and cooking for themselves at home.
McDonald’s is a tremendous company and may manage to reverse this trend — and it is already trying, with order-by-tablet for instance, where the customer can choose the ingredients on their burger. But it doesn’t have much time, because you can’t teach an old dog…. If millennials don’t get used to McDonald’s now, perhaps they never will. In the future those golden arches, that iconic piece of American life, shining in the dusk from coast to coast and from Canada to Mexico, may well start going out.
But it may have started to go down. In recent months the firm has registered its largest drop in sales in over 10 years. President Putin, who had a Moscow McDonald’s closed for “hygienic” reasons, would like to claim such a victory as his own, but he doesn’t merit it. The July scandal in China, where a local supplier is said to have delivered expired meat, has made a bigger hole in the firm’s global turnover. It influenced sales not only in China, but also in Japan, where the company is expecting a loss for the first time in 14 years.
But these Asian torments aren’t the reason the American media has recently been writing that the most difficult period of McDonald’s existence probably lies ahead. The main danger comes directly from within the U.S., from customers there. Young Americans, namely millennials, are abandoning this fast food.
Hamburgers in Bucharest
But before we return to the millennials in more detail, let me add one personal observation. Between 2001 and 2003, I repeatedly and relatively quickly — in a matter of days — traveled back and forth on the Washington-Prague-Bucharest axis. Sharp cuts left sharp impressions. McDonald’s stores in Washington suburbs were conspicuously empty, and the level of service generally corresponded to the poor clientele. The usual American “How are you today” had changed to a bored “What for you,” and then there were the worn-out floors, the overflowing trash cans. So I quit McDonald’s when the girl behind the cash register, after the usual “What will you have?” sneezed the whole time and wiped her hands on her apron.
In the Czech Republic, McDonald’s were full and one of the best alternatives for a break from driving, for instance. Although part of our society had an aversion (“I’d never set foot in McDonald’s!”), for the majority a visit to McDonald’s was a regular and rather pleasant experience — clean toilets, they don’t overcharge you.
And in Bucharest? How to end a successful week of school? Let’s take the kids to McDonald’s! In the same way, it was a cool place for a gathering of Bucharest high school youth, or a natural choice of where to invite your business partner for a work meeting, or to spend a pleasant moment over French fries for two.
I observed with amazement that in Washington, McDonald’s was a place where only construction site workmen smudged with paint and homeless people with their collected quarters wandered in, whereas in Prague it was a restaurant for middle class clientele, and in Bucharest a chic address where people went for a change, to have fun and to be seen. It occurred to me then what I’ve found in American media now. Worldwide, McDonald’s may still be an image or icon of modern-day America, but on its domestic playing field, it’s nearly the opposite. With every successive generation of American customers, it may become more and more a symbol of the past.
It’s the millennials who have in all probability begun this process. To tell the truth, these clever, digitally educated people are more or less disagreeable to many older Americans. Not just to the oldest, “silent” generation, who grew up with a social order that had a clear purpose, and who now in its old age observes how fast their country has changed. But even the mighty “baby boomers” generation, which emerged during the post-war expansion, has a bit of a problem with the millennials. They are envious of them, and rightly so, because these very boomers, in their youth, challenged American society of the ‘60s to a duel, and then governed America themselves — the last three presidents, Clinton, Bush and Obama, are all boomers. Now they see that their own children are pushing them out of their place in society.
In the language of sociology, the millennials are America’s “youngest adult generation.” They are the most ethnically and racially diverse: 43 percent are non-whites. At the same time, they are politically and culturally the most liberal generation — in the American sense of the word, left-leaning.
In the language of certain American commentators, they are narcissists who send each other selfies and regard their digitally illiterate parents with indulgent contempt. However, they still gladly return to the nest when they learn that making a living in the real world of the last few post-recession years isn’t the least bit simple; not by a long shot does every start-up succeed, and by no means is everyone a Mark Zuckerberg, one of the most famous millennials.
What if we tried to guess what those in the McDonald’s organization have to say about millennials? In private they would likely call them ungrateful brats. Officially, Steve Easterbrook, of McDonald’s top management, recently put it this way for the Wall Street Journal: “The millennial generation has a wider range of choices than any generation before them. They're promiscuous in their brand loyalty. It makes it harder work for all of us to earn the loyalty of the millennial generation.”
The Fading Golden Arches
Mr. Easterbrook was commenting on customer surveys showing that contemporary Americans between 12 and 30 — those millennials who until now have formed the McDonald’s customer base — are now saying farewell to that chain. Rather than passing under the yellow M, this generation would rather detour into other, newer chains with more diverse offerings — Chipotle, Panera Bread, Five Guys, Noodles & Co. — or to an ethnic restaurant, if they don’t favor shopping in bio-food stores and cooking for themselves at home.
McDonald’s is a tremendous company and may manage to reverse this trend — and it is already trying, with order-by-tablet for instance, where the customer can choose the ingredients on their burger. But it doesn’t have much time, because you can’t teach an old dog…. If millennials don’t get used to McDonald’s now, perhaps they never will. In the future those golden arches, that iconic piece of American life, shining in the dusk from coast to coast and from Canada to Mexico, may well start going out.
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