Feel-Good Fast Food

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Casual, mid-scale fare appeals more to consumers these days than quick-service meals. Has McDonald's bitten off more than it can chew?

Stop by an Arby's anytime soon and you might see tent-cards on the tables touting the fast food chain's more sophisticated offerings and ingredients. Anchoring the collateral graphics you'll find an image of a thirtysomething couple walking on the beach - sort of, fast food brought to you by JCPenney.

These days, this seems endemic in the quick-service restaurant industry, as it suffers from a sort of grown-up-deficiency syndrome. More and more, when not preparing their own meals at home, consumers opt for "home-meal replacement" options such as the supermarket prepared-foods sections and the more variety-prone, sit-down "casual mid-scale" chains that have invaded strip malls across America. And more abstractly, Starbucks has made a massive, softening impact on turnstile food consumption that has even the king of all burger chains, McDonald's, trying to paint itself as a more user-friendly option for an aging consumer base.

With its recent "Made-for-You" service imperative and "We Love to See You Smile" ad campaign, The Golden Arches is again trying to put on a more folksy face. And again, it's a tough row to hoe. "Made-for-You" involves a costly rollover of the company's kitchen production system to serve up sandwiches as they're ordered, versus making and sitting them under heat lamps. The ads attempt to frame this process in a service context, focusing on smiling, young counter workers in their cute caps - your satisfaction their professed, Capra-esque intent.

Industry watchers initially passed this off as a gross crib of Burger King's long-running "Your Way" anthem, but we can read a greater ambition into McDonald's initiative: To transform the image of minimum wage, labor-fueled, assembly line food service into a vaguely Starbuckian ideal of a coffee shop. McDonald's management has spent $400 million to retrofit kitchens and retrain staff to its affable intent. At press time, McDonald's had not returned American Demographics' phone requests for additional data on their campaign; however, Larry Zwain, McDonald's senior vice president of marketing, has said that when its customers walk into their restaurants, they are greeted by the "heart and soul" of the brand - the crew behind the counter. Good point; lofty ideal, and the biggest problem of the campaign.

Thing is, when you go into any traditional fast food restaurant, you're dealing with kids who, for the most part, have no intention of vesting the time or emotion of being a "brand ambassador." Some 59 percent of food preparation and food service employees were under age 30 in 1998, 27 percent of them teens, according to the Bureau of Labor Statistics. Pardon the cynicism, but we don't really expect or need these underpaid part-timers to treat us like we're at Starbucks, and, given the uniform, bright pastel plastic all around us, we're not going to mistake McDonald's for a low-key coffee shop.

Bob Goldin, executive vice president at restaurant research firm and consultancy Technomic Inc., stresses Big Mac's strength with children, blacks, and Hispanics - all of whom continue to get their own hard-targeted advertising - but it is the aging of the Baby Boom and its own maturing spawn that presents the impediment to more mass market growth for the company.

The fact is, McDonald's same-store sales have rung in pretty much flat for a few years not because of any exponential gains by Wendy's, Burger King, Subway, or Taco Bell, but because of a broader shift in Americans' eating habits. As the population ages, a bulk of it is veering toward a palette of newer, multi-splendored offerings just across the strip mall from Starbucks and its many cafe-style copycats, to the casual, mid-scale category populated by T.G.I. Friday's, Chili's, and Applebee's.

In real dollars, the National Restaurant Association projects quick-service restaurant sales to grow just 1.6 percent this year, down from a 2.3 percent gain in 1999. Meanwhile, consumers are expected to spur 3.1 percent growth in full-service restaurants, continuing a trend of growing at twice the rate of the fast food category's sales in recent years.

Even beyond the casual mid-scale siphon, fast-feeders' most popular meal - lunch - is being undermined among young and middle-aged professionals by boutique sandwich and soup chains (you know, the ones that put sun-dried tomatoes on everything). Dean & Deluca, Au Bon Pain, and a raft of similar concepts such as Sandella's, an expanding haute sandwich and salad chain, offer more relaxed, less plastic environments, similar to Starbucks, which itself has taken to selling sandwiches. Consumer traffic billowed some 15 percent in quick-service specialty chains, compared with a 2 percent growth in burger chains, in 1997, though it has leveled off and even shrunk by one percentage point last year, according to NPD Foodservice Information Group's CREST research. Mike Stimola, president of Sandella's, has claimed that his core 35- to 45-year-old, health-conscious, female customers are driving this whole sub-category, which means they're being lured, or kept away from fast food.

Also working against McDonald's is the general trend away from burgers, not just engendered by stereotyped, middle-aged women. Let's use chicken as a yardstick, as it has replaced beef as the all-purpose meat of choice. In only a generation, restaurants' share of national chicken consumption jumped from 29 percent in 1980, to 45 percent last year, per the National Chicken Council. More presciently, over the last five years, fast food restaurants saw a 6.1 percent growth in sales of chicken products, compared with a 2.6 percent average for burgers, according to CREST data. Even among its stalwart young adult supporters, the more traditional meat-and-fries fare of McDonald's is less popular. Almost half of consumers between ages 18 and 34 eat more white-meat chicken than their parents did at the same age, and start consciously making that choice at an earlier age, a survey by Direction Data Research found. Sure, McDonald's serves a few chicken items, but that typically isn't what lures people through the door.

Trying to reverse such patterns with a friendly face - actual or figurative - across an ad campaign and retraining initiative, seems to approximate trying to bring down a lion with a spitball.

So can putting on a smile, or at least advertising the notion, raise McDonald's above this sweeping consumption shift?

"It's Norman Rockwell advertising," says Goldin. "It's `We'll make you feel good and go the extra mile.' In all fairness, I think McDonald's does a better job at that than their direct competitors - though that might be damning them with faint praise - but it's a big, big, big battleship to run. It still gets down to individual store experience. History will prove that they will certainly not reverse the current pattern overnight."

McDonald's might impress its employees to smile for a time, the same way it makes sales off Disney trinkets while Disney's latest schlock is in-theater. But, c'mon, we've all been to a fast food restaurant - theirs and others - when the unimpressed 17-year-old half-mumbles a scripted welcome, convincing no one.

Sure, Starbucks has made its laid-back, helpful barristas part and parcel of its brand experience, offering their own suggestions from the menu, bringing free samples of coffee and light nosh fare around to tables. But keep in mind, Starbucks offers its employees, even part-timers, benefits and stock options - real incentives for zealous service in a vastly growing pool of part-time workers in this country. Consider the fruit of this: The length of time these people stick around to learn and become vested in the business. Starbucks' employee turnover rate hovers around 50 percent per year, whereas turnover in the fast food industry averages between 300 percent and 400 percent a year, according to a study by University of Minnesota professor Jim Stone of the Department of Work, Community, and Family Education.

Such turnover cuts to the quick of the McDonald's campaign. "It's considered a badge of honor to work at Starbucks, at least among that group, whereas it's certainly not one to work at McDonald's," Goldin says. That's not going to change just because the ostensibly heroic "crew" is ordered to become brand ambassadors by the marketing department at headquarters.

Admittedly, employee benefits involve another argument altogether. The big question mark here concerns McDonald's heart, or ego - writing a check its body can't cash. Already, out of four New York McDonald's restaurants visited by this 34-year-old, white male columnist since the campaign began, he found a hale greeting at only one - but again, not that he expects it of a cash-strapped 17-year-old. It may simply be an operational placebo for McDonald's to base its advertising on the most difficult promise it can make.

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