Can technology and gourmet menus reverse the decline of fast food?

Are millennials shunning McDonald’s? Do hipsters avoid Hungry Jack’s? Research by Roy Morgan reveals that Generations Y and Z are still markedly more likely than older generations to visit most big-name quick service restaurants, but in many cases their visitation rate is declining.

Burger breakdown

Between 2012 and 2016, the proportion of Australians visiting McDonald’s at least once in an average four weeks has declined from 31.2% to 29.4%, a trend that is seen across all generations. At rival chain Hungry Jack’s, the total proportion of visitors remained generally steady, with slight declines in visitation by Gen X and baby boomers, and a more pronounced decline in Generation Y (from 19.2% to 16.5%) offset somewhat by growth among Gen Z customers, (from 15.7% to 16.8%).

The decline in visits to mainstream burger chains has so far not benefited the more niche and gourmet-oriented burger chain Grill’d, which has seen a slight increase among Generation X visitors, a noticeable drop among Gen Y (from 8.0% to 5.4%) and little change among Gen Z.

However, the proportion of Generation Y who pay at least one visit to ‘other’ hamburger outlets in an average four weeks has grown from 4.7% to 6.4%, suggesting they could be frequenting either the smaller, hipsterised burger chains or the no-frills, family-owned outlets.

Hip chicken

KFC still rules the roost in the world of fast-food chicken, but the proportion of Australians visiting the chain at least once in an average four weeks has slipped slightly, from 20.4% to 19.3%. KFC’s popularity is strongest with Gens Y (23.9%) and Z (26.2%). Meanwhile, Generation Y (9.1%) outstrips the older generations for visitation to Red Rooster; but Gen Z (6.0%) is below average.

The smaller, more epicurean chicken chains Nando’s and Oporto are more popular with Generations Y and Z than with their elders, but their popularity has mainly declined since 2012. Unlike burger restaurants, there is no obvious shift towards ‘other’ hot chicken shops.

Pizza people

The inexorable rise of Domino’s Pizza is the key theme when it comes to the pizza segment of the quick service restaurant scene. Despite its mainstream status, Domino’s continues to draw the younger generations, with Gen Y up from 13.6% to 15.3% and Gen Z up from 14.2% to 18.5%, a growth also seen across other generations.

Norman Morris, industry communications director, Roy Morgan Research, highlights the use of technology at all stages of the ordering, delivery, pick-up and purchasing process by Domino’s as one reason the pizza chain has succeeded in bucking the declining trend experienced by other fast food restaurants.

Chains such as Crust Pizza and Pizza Capers, known for focusing on a more ‘foodie-oriented’ product, have gained Generation Z customers over the past four years, with the latter also experiencing a boost in Gen Y visitation.

“As Australia’s ‘foodie’ culture grows — evidenced in our changing cuisine preferences and the move towards vegetarianism, for example — the fast food industry is obviously going to be affected. And the much-reported trend among millennials (a group which spans approximately the first half of Generation Z and the second half of Gen Y) for hipster culinary experiences cannot be ignored,” Morris said.