After debunking the “earth shattering” myth that Millennials suck at car buying, I am back with the latest and greatest. It is no secret that I do not approve of the millennial-generation-bashing some people like to participate in. Hence, let’s dive right into it. Hey millennials, apparently we are killing chain restaurants! *holds breath for dramatic pause*
Ms. Sally J. Smith, President and CEO of Buffalo Wild Wings, made the news by issuing the company’s letter to shareholders. This in itself is nothing out of the ordinary as letters to shareholders get issued by public companies all the time. Wanting to be a publicly traded company comes with certain responsibilities. This being one of them. No big deal until I read this…
“Casual dining restaurants face a uniquely challenging market today. Millennial consumers are more attracted than their elders to cooking at home, ordering delivery from restaurants and eating quickly, in fast casual or quick-serve restaurants. Mall traffic has slowed. And, surprisingly, television viewership of sporting events (important for us, especially) is down.”
She is not alone in her apparent plight. John Antioco, former CEO of TGIF, stated that “When you look at the alternatives out there in the marketplace today and who’s creating buzz and creating excitement, it’s gone away from chain casual dining.” Others go as far as to call the chain restaurant dining experience not instagrammable.
Are Millennials Killing Chain Restaurants?
Nope, chain restaurants are killing themselves!
I get a real kick out of companies and leadership expecting winning streaks to endlessly continue. Yes, when the baby boomer generation was in its peak season, chain restaurants might have been all the rage and were practically printing cash. However, times have changed and said restaurants have made one fatal error by neglecting to adapt to the changing environment in time. Their competitors were waiting in the background and took the lead the second the opportunity presented itself.
Facing a uniquely challenging market
This market isn’t challenging. It is simply different because a new generation is “running the house” and we have different tastes. Shocker, I know! How dare us! Ms. Smith and her CEO colleagues appear to have missed the boat on adjusting their business strategies early on to fit the needs of this new generation. In the meantime, companies such as Chipotle have taken the lead based on the quality of food, prices, and convenience.
More attracted to cooking at home
When the price is right, the food is good, and the experience is fantastic, Millennials like to go out. I myself dine out once a week (as budgeted!). What I have a hard time with, however, is recalling the last time I dined at a TGIF or Chilis. I believe it was at a Buffalo Wild Wings restaurant actually, while on a road trip. Aside from the beer and soccer game, the experience wasn’t particularly memorable. Don’t blame millennials for cooking at home and saving money when you are not providing the right experience!
Ordering delivery and eating quickly
We live a different lifestyle than our parents. We work more, pick up side hustles, and like our lives to run as efficiently as possible. Convenience is key! As is bang for our buck in addition to the quality of food. After working a stressful week, no one wants to sit in a chain restaurant which has had the same look and feel for the past decades. We want to eat good food which won’t break the bank while spending time with family and friends. Preferably with a not so expensive glass of beer or wine in our hands.
Mall traffic has slowed
Millennials are acutely aware of where their money is going. Just take a look at the FI/RE movement. Why would we want to spend hours at malls, spending hard earned money on things we do not need, to then eat mediocre food on top of it? Most of us witnessed our parents struggle through the 2008 market crash and let me tell you something, it wasn’t fun to watch. I refuse to spend my cash on anything unless absolutely worth it. Value is crucial if businesses want to see the next decade!
Viewership of sporting events is down
I believe people watch just as many sporting events as in previous years. Here’s the difference. We decide to do so with a store bought beer or glass of wine in our hands for which we don’t get upcharged to the umpteenth degree. If there is a soccer game on, I am the first one glued to the screen. I do however refuse to spend $6 per beer while doing so when I can get a six pack for the same price. Once again, we’re the money conscientious generation.
In these, as you call them, challenging times, your chain as many others will need to reinvent themselves to survive. Us Millennials don’t want outdated décor, mediocre food, and overpriced drinks. We want amazing food and drinks as well as great surroundings, all while not breaking the bank. I couldn’t help but notice the following statement in your May 31st letter to shareholders.
“In these challenging times, we surely need fresh thinking and new ideas, but we also cannot afford to reinvent everything or unknowingly try again things that don’t work.”
The Millennial generation is like no other. Slapping a band-aid on the issue at hand will not solve your problems. This generation will not be fooled by a paint job, a few new pictures on walls, or redesigned menus. It is my humble suggestion for your industry to reinvent itself to fit this generation’s wants and needs. At whatever cost.
After all, what is the point in holding on to your cash if your company won’t survive this decade based on diminished patronage?
What do you think? Is the Millennial generation killing chain restaurants or are they simply killing themselves via inertia?
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