http://finance.yahoo.com/news/mcdonalds-faces-millennial-challenge-010500618.html
McDonald's sales have been stagnating for the past few years in many of its global locations. Its share of customers between 19 to 37 has drastically been decreasing. It is likely that those customers have switched to the "fast-casual restaurants" such as Chipotle or Panera Bread.
A strategy for McDonald's to include the younger generations into its regular consumer base while not alienating many of its current customers is essential for it to continue to compete. As of now, McDonald's hopes to reach out to the younger customers by revamping its public image. Many ideas are being considered by the company, including purchasing a growing "fast-casual" chain, but nothing is certain yet.
I saw this article as being a positive indicator of an improving overall economy. The demand for normal goods increases as income increases while the demand for inferior goods decreases as income increases. Although the classification of normal and inferior goods is relative to each individual, the article seems to categorize Chipotle, Five Guys and Panera as normal goods and McDonald’s an inferior good. The fact that people are willing to pay the extra money for higher quality food seems to suggest that people are earning higher incomes than before and that the economy is recovering.
ReplyDeleteI very much agree with Ally in that this seems to be a good sign for the economy. Personally, I have always seen McDonald's as a giant mega-company that has so much influence across the world and gets so much business, they haven't needed to change much. I was encouraged by the fact that McDonald's sees the threats to their business and that they could be considered inferior goods so they feel the need to make changes and improvements. Because of the dominance of companies like McDonald's, it seems to me like there was a bit of stagnation in the food industry and now with the emergence of healthy eating trends and other reasons for making different companies popular, competition is spurred on and the consumers now have more power than they have had in a long time. I think this is a great sign for the food industry and the economy.
DeleteI also agree with Jake and Ally. Furthering what Jake said, I think McDonald's will definitely have to look at their current menu and make the needed adjustments to provide an overall healthier menu to remain competitive. Most fast-casual chains boast natural or organic ingredients. I think if McDonald's wants to stay competitive, they will also have to incorporate these types of healthier options.
DeleteIn my opinion this article shows an aspect of consumer behavior, that being how each consumer has their own opinion on what is a normal good and what is an inferior good. It just shows that the demand for Mcdonalds has decreased because there are other, better substitutes out there that might be better in service and quality such as Panera Bread.
ReplyDeleteIt is interesting to see how fast-casual chains like Chipotle, Five-Guys and Panera have affected McDonalds performance inn the United States. Outside of the United States, McDonalds seems to be having other issues and not acting as a responsible food provider. Also, as a millennial I agree with many of the opinions expressed in the article. Fast-casual restaurants have a greater appeal to them then McDonalds does. It would be very difficult for McDonalds to make changes across the board to become a fast-casual restaurant chain. Although sales may have flat lined, they are not in bad shape.
ReplyDeleteI find it very interesting how McDonald's is now under pressure to make a change to the image, as well as the overall products of its company, because of the recent emergence of companies such as Chipotle, and Panera Bread. Given the decline in food sales from people aged 19-37, I feel as if that is a direct correlation to the over all knowledge and present information we have in regards to the nutritional quality of the food we eat. The push for healthier meals and rise in personal fitness as a result of social media, I feel is a direct correlation to people altering their food choices, because McDonald's food possesses the image of poor quality and cheap.
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