Boston, MA – August 9, 2011 – New research from L.E.K. Consulting shows that as quick service restaurant (QSR) brands try to stand out in a highly competitive market, only a select few are able to achieve broad appeal. Findings from L.E.K.’s survey of 1,300 U.S. consumers reveal that most QSRs succeed with certain generations, only to fail within others. In addition to identifying broad trends, our research examines the impact that the critical Gen Y segment can have on QSR brands today and in the future.
Gen Y consumers (ages 16-24) are a crucial spending force in the fast food industry, with nearly 20% of “Millennials” purchasing from a QSR almost every other day, according to L.E.K’s new report. By contrast, less than half as many Baby Boomers visit QSRs as frequently. Gen Y is also the social generation, with more than 40% of them saying that their meal or snack selections are influenced by friends – twice the level of any other age group.
“Our research shows that many QSR brands that perform well across the general population are falling short with Gen Y,” said Alan Lewis, Vice President in L.E.K. Consulting’s Consumer Products Practice.
Gen Y, Other Demographics Rank Their Favorite QSRs
Dunkin Donuts, Chipotle and Chick-fil-A are the rare few QSRs that rank highly across all generations. However, different generational preferences become clearer further down the list. Subway and Boston Market fall out of Gen Y’s top-10 favorites primarily because that generation is less concerned with healthy and quality ingredients than other age demographics. And while McDonald’s wins with older consumers for its low prices and convenient locations, it misfires with Gen Y, which instead flocks to Wendy’s and Burger King for “tastier” menu items.
L.E.K. Choice Conversion Score Rank
L.E.K.’s research finds that Gen Y consumers tend to be the most passionate generation about their favored QSRs, so brands need to consider how to capture these customers now. In L.E.K.’s Choice Conversion Score (CCS), a ranking that measures the strength of a brand’s connections with what consumers are seeking, Gen Y rated their preferred brands on average 12% higher than other generations. If these strong connections persist as Gen Y gains purchasing power, lagging QSRs will face an added challenge of unseating strongly entrenched brands.
“Winning consumers with traditional value propositions won’t be enough to sustain a QSR brand in the future if it cannot cultivate loyalty from Gen Y today as they increase their spending power,” said Jon Weber, Vice President and head of L.E.K.’s Restaurant practice. “QSRs need to think now about ways to recalibrate their offerings and customer engagement techniques to win and keep Gen Y’ers loyalty for the long-term.”
Additional findings are available in the L.E.K. Executive Insights report titled, “Winning the Hearts (and Wallets) of QSR Consumers.”
About L.E.K. Consulting
L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and analytical rigor to help clients solve their most critical business problems. Founded more than 25 years ago, L.E.K. employs more than 900 professionals in 20 offices across Europe, the Americas and Asia-Pacific. L.E.K. advises and supports global companies that are leaders in their industries – including the largest private and public sector organizations, private equity firms and emerging entrepreneurial businesses. L.E.K. helps business leaders consistently make better decisions, deliver improved business performance and create greater shareholder returns.
L.E.K. helps retailers, consumer goods companies, food & beverage brands, and restaurants improve the value and relevance of their brands to consumers. We uncover unmet customer needs and neglected industry segments. The result is insights and ideas to help our clients optimize their brands through the best possible combinations of product features, service offerings and pricing for targeted customer segments. For more information, go to www.lek.com.
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L.E.K. Consulting Report Showcases Areas of Opportunity for Quick Service Restaurants