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"Millennial" Market Not Lovin' McDonald's: Report

The report indicates younger diners are seeking out healthier options and customizable menus

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    AP
    FILE - In this Dec. 20, 2010 file photo, McDonald's signs sprout from the restaurant's parking lot in New York. McDonald�s says a key sales figure edged up modestly in July, 2013, as the Dollar Menu and Big Macs in the U.S. helped offset declines in other parts of the world. The world�s biggest hamburger chain says global sales rose 0.7 percent at restaurants open at least 13 months. That included a 1.6 percent increase in the U.S., where it said �everyday value offerings,� breakfast and staples such as the Big Mac drove up results. (AP Photo/Richard Drew, file)

    It looks like millennials aren’t munching on McDonald’s as much as they used to.

    Customers in their 20s and 30s are choosing to dine elsewhere, particularly at “fast-casual” restaurants like Chipotle and Five Guys, according to demographics reported by the Wall Street Journal.

    The report indicates younger diners are seeking out healthier options and customizable menus, creating a hurdle for McDonald's as it grapples with one of its worst slumps in the last decade.

    According to the data, the percentage of customers age 19 to 21 who visited McDonald’s monthly has fallen by 12.9 percentage points since 2011, and the percentage of customers age 22 to 37 visiting the chain in the same period stayed flat.

    In turn, the percentage of customers in those age groups visiting fast-casual restaurants monthly during that same time period grew by 2.3 and 5.2 percentage points.

    It’s a trend that the world’s largest hamburger chain has been trying to overcome after a reported global decline.

    The Illinois-based chain reported earlier this month that a key sales figure fell 2.5 percent in July, due in part to persistent weakness in the U.S.

    While the company attributes a 7.3 drop in an international unit encompassing Asia, the Middle East and Africa to a recent food safety scandal in China, changing food habits could be the culprit for the 3.2 percent drop in the U.S.

    Chains like Chipotle, for instance, are gaining favor by touting more wholesome ingredients and the ability to customize food.

    Last month, McDonald’s ranked last for burger taste in a Consumer Reports survey of 32,405 subscribers. Respondents in the survey continuously favored the so-called fast casual restaurants over some of the mega-chains like McDonald’s, Taco Bell and Burger King.

    “Fast-casual dining in places like Chipotle and Panda Express lets the consumer guide the staff to prepare their meal just the way they like it,” said Darren Tristano, executive vice president of Technomic, a food-service research and consulting firm that compiled the data for the Wall Street Journal.

    McDonald’s is attempting to make waves in the younger market, once a prominent audience for the chain, by introducing healthier options and debuting apps and mobile pay options.

    McDonald’s Global Chief Brand Officer Steve Easterbrook told the Wall Street Journal the millennial generation is “promiscuous in their brand loyalty,” making it more difficult to earn their loyalty. 

    Easterbrook cited a wider range of choices for the shift in preference for younger generations.

    The chain has also noted menu issues and cited financial struggles for lower-income customers as reasons for the U.S. drop.

    McDonald's CEO Don Thompson said the company complicated its menu and slowed down service by introducing too many items too quickly. He said the company is working on getting the basics right — such as improving service.