Consumer Reports has released its fast-food reader survey, which indicate a concerning trend for major QSRs such as Burger King, McDonald’s and KFC.
Respondents said they are seeking out quality food to make their dining choices, and that convenient locations are less important than they were in the publication’s 2011 report. Driving home that point is McDonald’s, which finished last in the burger category, and KFC, which was last in the chicken category.
The results, which appear in the August 2015 issue, suggested this shift – of quality trumping convenience – is being driven by Millennials, and is an impetus behind the staggering growth of the fast casual segment.
The report was developed based on consumers’ consumption of 96,208 meals at 65 of the largest chains in the $680M restaurant industry. The top 5 results by category include:
- The Habit Burger Grill
- In-N-Out Burger
- Five Guys
(Bottom five include: A&W, Krystal, Burger King, Jack in the Box and McDonald’s, respectively).
Sandwiches and Subs
- Portillo’s Hot Dogs
- Firehouse Subs
- Jason’s Deli
(the bottom five are: Einstein Bros. Bagels, Corner Bakery Café, Arby’s, Subway, Au Bon Pain, respectively).
- El Pollo Loco
- Boston Market
- Baja Fresh
- Moe’s Southwest Grill
Consumer Reports also asked readers what their favorite “fast food alternatives” (fast casual concepts) are, with the following results:
- Chipotle Mexican Grill
- Firehouse Subs
- Five Guys Burgers and Fries
- Jason’s Deli
- Jersey Mike’s Subs
- Jimmy John’s Gourmet Sandwiches
- McAlister’s Deli (most improved from the 2011 survey)
- Panera Bread
A need to respond
With the results displaying such a dramatic shift since 2011, Consumer Reports’ senior projects editor Tod Marks said the report should serve as a “wake-up call” for the industry.
"Our survey clearly shows the big guys need to respond," he said.
Technomic’s EVP Darren Tristano added that consumers, especially Millennials, are gravitating toward meal customization often found at fast casual concepts, such as Chipotle and Panda Express. Conversely, he said many of the larger QSR chains have “lagged in offering higher-quality ingredients.”
Consumer Reports points to McDonald’s as an example of this “lagging," writing: "The chain, which serves flash-frozen patties made with 100-percent USDA-inspected beef, touts them as free from ’preservatives, fillers, extenders, and so-called pink slime.’ Such a pledge might be comforting, but it’s hardly a rousing endorsement."
Survey bottom feeder
This isn’t the first time this year McDonald’s has been painted negatively by consumers. The recently released 2014 American Customer Satisfaction Index also ranked the Golden Arches last.
Like the Consumer Reports study, ACSI customer satisfaction for smaller restaurant chains is up, while all of the largest chains experienced drops in customer satisfaction. The fast casual segment helped make up this difference as well, as customer satisfaction with limited-service restaurants is steady at an ACSI score of 80. This marks the third year in a row that LSRs have maintained their highest-ever level.
“This is a considerable transformation for an industry that posted scores in 60s throughout the 1990s and never exceeded an ACSI score of 70 until 2001,” ACSI Director David VanAmburg said in a news release. “Price has always been a strong point for fast food, but fast casual restaurants have been improving quality and service at such a brisk pace that customer satisfaction with fast food is nearly as high as dine-in restaurants.”
The group of smaller chains — including the rapidly growing fast casual segment with brands like Panera and Chipotle — now has a higher level of satisfaction than any of the major QSR operators since the Index’s inaugural year of 1994.
Among the biggest companies, pizza dominates, with all four of the largest pizza chains topping the category. Papa John’s (unchanged) and Pizza Hut (+3 percent) share the lead at 82, with Little Caesar (-2 percent) and Domino’s Pizza (-1%) not far behind at 80.
Subway falls out of the top spot (-6 percent to 78) to tie with Wendy’s, and Burger King is unchanged at 76. Starbucks is down 5 percent to 76, followed closely by coffee rival Dunkin’ Donuts at 75 (-6 percent). KFC declines the most, dropping 9 percent to 74. Fellow Yum! Brands chain Taco Bell is also down (-3 percent to 72). At the bottom of the category, McDonald’s dips 3 percent to 71.
With a score of 82 percent satisfaction, up 2.5 percent from last year, Pizza Hut was the only restaurant in the category to deliver a year-over-year increase, according to the release.
"At Pizza Hut we understand that providing great food and a positive customer experience are the cornerstones of success in our business," said David Gibbs, president, Pizza Hut, U.S. "We are extremely proud of the commitment to this being shown by each of our 120,000-plus employees. This rating is a reflection of that commitment and we will continue to strive for best-in-class customer satisfaction in the future."
Papa John’s, meanwhile, achieved the highest rating for the 13th time in the past 15 years. In addition to the top overall ACSI rating, Papa John’s earned the highest score regarding overall quality, product quality, service quality and customer expectations in the individual ACSI ratings.
Photo provided by Flickr user nikonvscanon.