Today’s headlines are full of articles blaming millennials for soft restaurant sales. As I read articles and watch videos like “Millennials are Killing Lunch” (Fortune, March 2017) and “Millennials are Killing Chains like Buffalo Wild Wings and Applebee’s”(Business Insider, June 2017), I immediately think of the Mike and Mechanics song, “The Living Years” and the opening line, “Every generation blames the one before.” I can’t get that song out of my head as I am bombarded with article after article.
It is true that with more than 80 million millennials in the United States and a buying power of $200 billion, they can demand change. But is killing restaurants the change they really want? Millennials actually spend an average of 10.6 percent more at restaurants than any other generation but when it comes to eating out, they expect convenience and value (lower cost).1 If restaurants don’t provide, will millennials be stuck with the proverbial question, “who moved my cheese?”
The convenience that millennials seek may contribute to the stereotype that they are lazy, but can you blame them for not wanting to spend their time waiting in line? Grocery store pre-made meals, kiosks, meal delivery kits and delivery/off-premise are ways to save valuable time and everyone benefits. According to The NPD Group, delivery now represents 1.7 billion foodservice visits annually and young adults are the heaviest users. To compare generations, 29 percent of millennials ordered restaurant foods/beverages via delivery in the last week while nearly 50 percent of boomers and older, use delivery service less than once a month.2
Delivering both food and alcohol could be the much need game changer for casual dining.
Delivery and off-premise food is booming and savvy eateries are capitalizing on this new revenue stream which is driven by millennials. Unexpected players in the game include The Honey Baked Ham Company® which is now testing delivery during key holiday periods.
In addition, TGI Fridays has begun testing the food and alcohol delivery service in Dallas and Houston and they hope to expand nationwide in 2018. To-go and delivery sales continue to grow and Friday’s has seen takeout sales grow by 30 percent since launching online ordering last summer.3 Delivering both food and alcohol could be the much need game changer for casual dining. I can only hope that they start delivering their signature drinks in my area soon.
With more convenient options and delivery booming, the real question should be, “are millennials changing the way we order food?”
Millennials want value and they want it big! Part of this generation graduated college during the recession and struggled to find a job while others watched their parents struggle, change buying behaviors or start to save. Millennials are mindful of their paychecks and technology makes it easy for them. According to Nielsen, 97 percent of 18-34 year olds own a smart phone thus providing them easy access to sites and apps with digital coupons. And according to an Acosta survey, 58 percent of millennials reported using the internet to “find the best restaurant deals,” compared with 47 percent for Gen X and 23 percent of boomers.3But millennials aren’t just looking for deals online.
According to the 2018 Valassis Awareness-to-Activation Study, 55 percent of millennial parents said even if they see an interesting restaurant ad on TV, they will only visit that restaurant if they also have a print coupon.5 This is a meaningful statistic because it’s 20 points, or 57 percent higher than all consumers. While TV drives brand awareness, restaurants that want to attract and activate the millennial community need to have a balanced media plan that includes both print and digital coupons. Restaurant brands like Darden are recognizing this generation’s need for value and are acting strategically to gain their attention. Gene Lee, CEO of Darden, stated during an earnings call:
“Contrary to popular belief, millennials still like going to restaurants, millennials still want to come to casual dining. Thirty percent of our guests are millennials, compared to 24 percent of the overall population. So we over-index with millennials… we made the strategic choice to underprice to inflation, so we’re underpricing our competitors.”
Consumers across generations value saving money but due to the sheer size, millennials have the buying power to demand these incentives. If restaurants don’t deliver on savings they’ll miss out on this large population of cross-generation value seekers.
Millennials aren’t killing restaurants but they are reshaping the way Americans eat. As I conclude my thoughts on this generation’s early contributions to the restaurant industry, I still wonder why they have a negative stereotype? Could it be us? What other areas will millennials impact? Will they demand equal pay? Work/life balance? Less expensive organic food? Will free Wi-Fi be the new normal for restaurants?
Millennials are actively seeking restaurant coupons both on and offline and they are the driving force in mainstreaming delivery. It’s important for restaurants to remain relevant in these areas and it’s equally important they use multiple platforms to communicate these initiatives.
As the tune from the song, “The Living Years,” “Every Generation Blames the One Before,” still plays in the back of my mind, I’m reminded that even if we’re not ready to stop blaming the millennials, they’ll soon get a reprieve when Gen Z comes of age.
1 3 Tips for Serving Millennial Consumers, QSRweb.com, Sept. 11, 2017
2 Delivery is Bright Spot for U.S. Foodservice Industry, NPD, April, 2017
3Yes, Millennials Dine Out a Lot. But They Use Coupons, emarketer, June 6, 2017
4TGI Fridays brings the party home with alcohol and food delivery service, Today, Sept. 2017