4 Reasons Chipotle Is Destroying Fast Food
For years, the fast food restaurants enjoyed rapid and dependable growth, reports Leslie Patton at Bloomberg Businessweek.
But in recent years, U.S. growth has slowed down or stalled - largely because of competition from fast-casual chains led by Chipotle, according to Patton.
The burrito chain posted a 9.3% sales gain in 2013. Meanwhile, former parent company McDonald's saw sales fall by 1.4%.
Here are a few reasons consumers are increasingly flocking to Chipotle instead of traditional burger chains.
1. Diners who eat healthier don't go to burger chains. McDonald's CEO Don Thompson acknowledged that only a small percentage of customers buy salads, while Burger King killed the lower-calorie Satisfries it introduced in late 2013. Fast food chains continue to be plagued with a perception their food is heavily processed and full of additives. Meanwhile, Chipotle touts grilled meats and vegetables without antibiotics or GMOs.
William Wei / Business InsiderBurger King's Satisfries, which boasted fewer calories than regular fries, were axed from the menu after a year.
2. The menu remains classic. While McDonald's tacks on new menu items to entice customers, Chipotle has stuck to the same menu since it opened. The menu at McDonald's has grown 70% since 2007, Bloomberg reported last year. Chipotle does a few things really well, making it easier to execute and reduce customer wait times.
Mike Blake/ReutersMcDonald's "overloaded" menu has been blamed for its current woes.
3. Millennials want customized food. Chipotle's menu items are built around customization, making it beloved by the younger generations, according to Patton. Meanwhile, McDonald's and Burger King's value meals give the perception that options are limited. To appeal to a younger demographic, McDonald's has been testing a program that lets patrons customize their burgers with toppings like jalapenos and guacamole.
McDonald's Facebook PageMcDonald's is testing customizable burgers to help business.
4. Instant gratification. Chipotle has aggressively worked to reduce wait times during peak periods. Meanwhile, McDonald's is struggling with the longest drive-thru wait times in decades. McDonald's is attempting to fix wait times by cutting some menu items and adding employees to assist at check-out. But the overloaded menu makes it difficult for operations to run smoothly, Brian Sozzi, chief equities strategist at Belus Capital Advisors, told Business Insider.
