McDonald's losing connection with millennials?

Tribune reporter
Is McDonald's losing millennials? WSJ examines the trend

McDonald’s Corp. appears to be losing its connection with millennials, according to a published report.

Data compiled by Technomic Inc., a Chicago restaurant consultancy, for the Wall Street Journal showed that the percentage of 19 to 21 year olds who visited McDonald’s monthly has plunged in recent years, dropping nearly 13 percentage points since the beginning of 2011, according to the Journal report. Meanwhile, monthly visits to U.S. McDonald’s by those aged 22 to 37 have been flat.

Sales at long-standing McDonald’s U.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. The Oak Brook-based burger giant can point to a number of issues for its falling sales at longstanding U.S. locations, including an extra chilly winter that kept people at home and no big new Monopoly or other major promotional draw.

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.

McDonald’s said it understands that millennials and all of its customers “share a desire for fresh, quality ingredients” and that it is working to offer a wider variety of items. It recently opened a digital office in San Francisco and said sponsorships such as the World Cup, NFL and blogger programs help it connect with millennials.

On Friday, McDonald’s announced that Jeff Stratton, the president of its U.S. operations, will be replaced in October by a former McDonald’s executive, Mike Andres. McDonald’s warned in early August 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.

Shares closed Monday at $94.44, down a penny.
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