Subway vs. McDonald's: The Fast-Food Giant's New Opposition

Last year has been particularly tough for several industries, but one industry that consistently stays on top of thingsand has largely avoided the worst of the economic crisis is the fast-food market. Its reigning king, McDonald's, is not the one reaping the benefits of the good fortunes, though; it's Doctor's Associates, Inc.

You may be forgiven for not knowing who the Doctor's Associates Inc. are, but you will almost certainly have eaten at - or heard of - their sandwich shop chain, Subway. Subs are the next big thing of the fast-feeding industry, as Subway's nearly 40 000 restaurants worldwide can attest to. That's almost double the amount they had back in 2003. According to an article at Ad Age, an online marketing business portal, Maccy D's has been looking over its shoulder for a while now, and they specifically target one core demographic that may just help them beat Subway in the long run.

Folks over at McDonald's are pretty sure that millenials are the key. Millenials - children born around the millenium mark - comprise very different age groups, despitebeing born around the same time. In fact, for marketing purposes, McDonald's defines them as people that are between the ages of 18 and 32. The recently leaked internal memo that McDonald's issued on the topic read, „Our customers are consistently telling us, particularly millennials, they expect variety, more choices, customizationand their ability to be able to personalize their food experience.” This means that in order to compete with the inherently modifiable sandwich business, the Oak Brook-based Ronald McDonald's company had to offer something similar - and yet distinctiveenough for customers to still want it.

Enter McWrap: a delicious tortilla-like sandwich made of thin dough wrapped around pieces of chicken and some veggies. You can order it grilled or crispy and in three varieties: sweet chili chicken, chicken and bacon and chicken and ranch. Its trial run has been pretty successful, and it expects to reach the discerning millenial as its target de jour owing to its huge customizability. The memo attests to that, stating that McWrap „affords us the platform for customization and variety that our millennial customer is expecting of us.”

More than that, Maccy D's are sure that without McWrap, they would lose 22% of their customers to Subway in particular - and these would be almost entirely the millenials.

That's because things are looking rather grim for traditional fast-food chains and burger restaurants the world over, while sandwich chains and casual fast-foods experience a near continual growth. Gary Stibel, CEO of the New England Consulting Group, who are monitoring the fast-food markets for various statistics, says that millenials are the most influential group here, the ones driving the industry now and bound to do so in the future. „They're 80 million [people] but they're influencing the next 80 million, both younger and older,” he says. And since 2007, according to another market researcher, NPD Group, hamburger chains have seen a massivedecline of 16% in traffic from millenials. That's 3.6 billion visits by November 2012,compared to 4.2 billion in November of 2007.

The elusive target group of 18 to 30-somethings has been on the radar of most burgerjoints around the globe. So far, McDonald's, Wendy's and Burger King - global leaders as far as burgers go - can only meet the needs of 29% of all millenials. Restaurant analyst Lynne Collier has been keeping tabs on McD's for a few years now and is rather skeptical about the role of Subway as a threat to McDonald's global domination. She says, „I don't automatically think Subway, but apparently they are viewing Subway as somewhat of a major competitor.”

She is pretty clear on the role of millenials in the post-crisis marketplace. „Youngeraudience is definitely very important for all QSR restaurants, including McDonald's,” she was quoted as saying, adding „I think that age group is focusing a little bit more on quality, healthy foods.” She even says that her own children, already in millenial age bracket, are „a lot more sophisticated about food and quality.”

Health issues are high on the younger generation's agenda. Modern millenial consumer has witnessed Morgan Spurlock's movie „Super Size Me!” that had shown howdevastating to one's health can eating at McD's be. At the same time, they've been growing up to inspirational stories like that of one Jared Fogle, who has lost more than 100 kilograms eating sub sandwiches at Subway. It's pretty clear that socially conscious young adults may choose what they perceive to be a less corporate andfaceless, and a more health-oriented and individualistic way of living.

The social image of the company may also play a significant role with the newlyindependent millenials. Let's not forget that these are people fresh out of universities or just starting their families, raised on anti-corporate culture and very wary of the „suit culture” that, in their eyes, may have been the one to blame for the financial crisis. To them, social issues, activism, transparency about food composition andresources, may be much more important than cost or accessibility. According toresearch by Technomic (food-related research portal) carried out in May, 2012, McDonald's didn't score high with socially aware millenials. In fact, Maccy D's couldn't be found in any of the key areas important to millenials - social responsibility, food quality, supporting local community. These categories have all been dominated by local or casual brands like In-N-Out Burger, Chick-Fil-A (despite the last year's scandal) and McAllister's Deli - not exactly household names outside of the US, but big enough already to perhaps cause McD's to start eye them with suspicion.

Nick Setyan, a restaurant analyst at Wedbush Securities notes that McDonald's alreadyfaces stiff opposition in every corner of the market, including the higher quality burger offered by such chains as Five Guys or Smashburger. „A millennial will choose to go to one of those brands as opposed to McDonald's. It's … not something that'scome up recently.”

While McWrap does indeed sound (and taste) delicious, McDonald's will have to come up with a lot more to secure its global position in the years to come, with millenials playing larger and larger role, as their palates grow more discerning and their wallets get heavier.

VOCABULARY

particularly - szczególnie
consistently - stale
to stay on top of things - pilnować czegoś, tu: być na topie
reigning - rzÄ…dzÄ…cy
to reap the benefits of sth - skorzystać na czymś, zebrać plony czegoś
fortunes - losy, szczęście
chain - sieć (restauracji)
sub (submarine sandwich) - długa kanapka, zrobiona z bagietki
to attest to sth - świadczyć o czymś, potwierdzić coś
according to - zgodnie z, według
Maccy D's - pot. McDonald's
to look over one's shoulder - oglądać się za siebie, mieć się na baczności
core - kluczowy
demographic - warstwa społeczna, grupa demograficzna
folks - ludzie
millenial - dziecko millenium, o osobach urodzonych w okolicach roku 2000 lub w latach 90-tych
mark - granica, pułap, poziom
to comprise - stanowić, obejmować, zawierać
despite - pomimo
leaked - ujawniony, „wyciekniÄ™ty”
internal memo - nota do użytku wewnętrznego, poufna notatka
to issue - wydać (np. oświadczenie)
variety - różnorodność
customization - dostosowanie, możliwość dopasowania czegoś do własnych potrzeb
to compete with sb - rywalizować z kimś
inherently - z natury, domyślnie
distinctive - różny, wyróżniający się
delicious - smaczny, wyborny
dough - ciasto
veggies - warzywka
crispy - chrupiÄ…cy
trial run - próbny rozruch, okres próbny
to reach - osiągnąć, dosięgnąć
discerning - wybredny
X de jour - coÅ› modnego w danej chwili, chwilowa moda
owing to sth - z powodu czegoś, ze względu na coś
to state - oświadczyć
to afford sth sb - przyznać coś komus, dać coś komuś
entirely - wyłącznie
grim- ponury, niezbyt optymistycznie
CEO (Chief Executive Officer) - dyrektor naczelny
influential - wpływowy
researcher - badacz
decline - spadek
traffic- tu: zainteresowanie produktem (ze strony jakiejś grupy klientów)
compared to - w porównaniu do
elusive - nieuchwytny
to be on sb's radar - znaleźć się w kręgu czyichś zainteresowań, być na czyimś celowniku
joint - tu: knajpka
to meet sb's needs - spełnić czyjeś potrzeby
to keep tabs on sb - pilnować kogoś, śledzić za kimś
threat - zagrożenie
apparently - najwyraźniej
audience - tu: klienci, odbiorcy
definitely - z całą pewnością
QSR (quick-service restaurant) - restauracja szybkiej obsługi
to be quoted as saying - przytoczyć czyjeś słowa
quality - jakość, tu: dobrej jakości
bracket - przedział, kategoria
sophisticated - skomplikowany, tu: wyszukany, wybredny
to be high on sb's agenda - znajdować się wysoko na liście czyichś priorytetów, być ważnym dla kogoś
generation - pokolenie
to witness - doświadczyć
devastating - niszczycielski
inspirational - inspirujÄ…cy, natchniony
socially conscious - świadomy zagadnień/problemów społecznych (np. ubóstwo, narkotyki itp.)
young adult - młody dorosły, o osobie między 18 a 21 rokiem życia
to perceive - postrzegać
faceless - bez twarzy, pozbawiony indywidualnych rysów
significant - znaczÄ…cy
independent - niezależny
wary of sth - nieufny wobec czegoÅ›
to blame sb for sth - obwiniać kogoś o coś
transparency - przejrzystość
composition - skład
resources - zasoby, środki
accessibility - dostępność
to carry out - przeprowadzić
to score - osiągnąć wynik
aware - świadomy
responsibility - odpowiedzialność
community - społeczność
casual - luźny, swobodny
brand - marka
household name - powszechnie znany produkt/marka
to eye sb - zmierzyć kogoś wzrokiem, przyjrzeć się komuś uważniej
to face - stawać w obliczu czegoś, stykać się z czymś
stiff opposition - ostra konkurencja/opozycja
including - w tym, wliczajÄ…c
as opposed to sth - w przeciwieństwie do czegoś, w odróżnieniu od czegoś
to come up - pojawić się, okazać się
to come up with sth - wpaść na coś, wymyślić coś
to secure - zapewnić, załatwić

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