Kids are becoming McDonald's biggest problem
For decades, McDonald's wooed young children to the Golden Arches with promises of Happy Meals, colorful plastic play places and costumed burger mascots. It was a tactic that helped the Big Mac hook lifetime customers at a young age.
But kids aren't eating as much fast food as they did in the past. And with birth rates plunging, there are far fewer young mouths to feed.
In 2003, nearly 39% of children of the US ate fast food on any given day, according to a new study published in the Journal of the American Medical Association. By 2010, that share had declined 20% to just under 33%, Reuters reports.
Meanwhile, birth rates have declined 9% between 2007 and 2013.
These statistics outline a big problem for McDonald's, Warren Shoulberg writes on the industry blog The Robin Report.
"That's 9% fewer little kids watching McDonald's TV commercials and producing 3.4 meals to be eaten when the family goes through the drive-thru," Shoulberg writes. "Nine percent fewer kids who will grow up addicted to meat on a bun. And 9% fewer kids guilting their parents into going to see Ronald…and eating McDonald's fries."
Facebook/McDonald'sMcDonald's Happy Meals account for 10% of the company's sales.
That's bad news for a company that gets 10% of its revenues from Happy Meals, and McDonald's is already feeling some of the negative effects.
Families with a child age 12 or under represent 14.6% of McDonald's customers today, down from 18.6% in 2011, according to Technomic.
"Kids are more sophisticated," Mary Chapman, director of product innovation at Technomic, told Crain's Chicago Business in September. "They're not just looking for the Golden Arches and the toy."
But executives are ignoring this problem and instead focusing on other initiatives to revive lagging sales, such as paring down the menu and speeding up customer service, Shoulberg writes.
"One of the foundations of the McDonald's corporate juggernaut has always been its catering to young families with kids," he writes. "Yet nowhere in any of its announcements about new plans is there much mention of appealing to kids and even if there were, therein lies the fatal flaw in any McDonald's turnaround."