McDonald’s, once dominant in the fast food market, now faces competition from higher-end eateries like Chipotle and Shake Shack—but it’s in greater danger of losing value-seeking customers to Taco Bell, which has attempted to draw in 15- to 35-year-olds with novel menu items and social media-savvy marketing.
Taco Bell’s breakfast offerings, which launched last spring, now make up 6% of its business, and cheeky ads depicting McDonald’s as a totalitarian state caught viewers’ attention during the Walking Dead finale this spring. “This is a platform we can build for the next two decades,” says Taco Bell CEO Brian Niccol. Meanwhile, McDonald’s—whose second-quarter 2015 revenue fell by 10%, following an 11% slide in the first quarter—is testing third-pound sirloin burgers and an all-day breakfast menu (long demanded by stoners and others) that includes healthier items such as an egg-and-kale breakfast bowl.
To get a sense of who has the advantage in this rivalry, we spoke with customers at both Taco Bell and McDonald’s stores near Manhattan’s Union Square:
At Taco Bell, 18 E. 14th St. June 9, 2015, 12 p.m.
Lejonne Horsford, 18, from New York City
Kanji Rodreguez, 18 from New York City
Cairo Codling, 18 from New York City
Jaelis Perez, 18 from New York City
(This is their first time having lunch together at Taco Bell.)
Fast Company: What made you all decide to get lunch here today?
Cairo: We wanted to try it. See what it’s all about.
FC: Which do you go to more, Taco Bell or McDonald’s?
C: It’s cheap. It fills you up. It doesn’t taste bad.
Lejonne: It’s what I know.
C: Taco Bell isn’t advertised as much, I feel like. You hear more about McDonald’s.
FC: Taco Bell has been doing all this stuff to attract millennials, like making healthier food and taking out artificial ingredients. Does stuff like that work on you?
Kanji: No. Taco Bell has a bad reputation anyway. I don’t eat meat, but if I did I would not eat meat here because I don’t know what the hell they put in this stuff.
FC: So McDonald’s seems healthier?
L: I don’t know. I don’t question what McDonald’s puts in their food. Like, I’m definitely questioning the meat from here (gestures to plate) but I wouldn’t from McDonald’s.
C: McDonald’s is more filling. It has more variety.
K: But Chipotle is better than both. (Everyone nods)
C: I think it’s the atmosphere of Chipotle.
K: They don’t make it seem like it’s a fast food restaurant. I think there’s just a negative connotation with fast food right now. Chipotle is fast food, but it doesn’t seem like it.
FC: So let’s say you have $10. You can get two or three meals at McDonald’s or Taco Bell, or one at Chipotle. Which do you choose?
K,C, Jaelis: Chipotle.
James, 24, from New Jersey, lives in Brooklyn
Fast Company: Taco Bell or McDonald’s?
James: Taco Bell. Growing up, this was a tradition with my friends, almost like a joke: it’s not Mexican food, it’s Taco Bell. I never eat McDonald’s.
FC: Taco Bell has been trying to improve its menu and create an edgier image to appeal to millennials. Do you think that works?
J: I don’t really care one way or the other, honestly. I accept that when I come here I’m eating shitty food.
FC: McDonald’s is doing a similar thing, introducing new menu items like a kale and egg breakfast bowl. Would you eat that?
J: That sounds terrible.
FC: What would make you go to McDonald’s?
J: If it was the only thing at a highway rest stop. The unhealthiness of the food is not what keeps me away from McDonald’s. I just don’t eat it.
Samir Mody, 24, lives in Brooklyn
Fast Company: Do you ever go to McDonald’s?
FC: McDonald’s is trying attract millennials by making things like kale and egg breakfast bowls. Would healthier ingredients make you want to go there?
S: If I wanted eggs and kale, there are other brunch spots I’d go to, where it’s better quality.
FC: So what about Taco Bell?
S: Taco Bell is definitely unhealthy, but I’d say their uniqueness is important. Some of the things they have here you just don’t find anywhere else. I have a nostalgia about it because there used to be one right next to my college, but they also have really cool things like Doritos Locos tacos. Things where, yeah, they are unhealthy, but every once in a while it’s not bad if I want one.
FC: What would McDonald’s have to do to get you to go there?
S: That’s the million dollar question. I honestly don’t know. Be more like In N Out? Or Shake Shack?
Woman, 31, requested anonymity (“I don’t want my name mentioned because I don’t want people to know I go to Taco Bell”) but works in New York
Fast Company: So do you normally go to Taco Bell or McDonald’s more often?
Woman: I definitely don’t go to McDonald’s. I’m actually vegan, and Taco Bell has good options. It’s kind of my guilty pleasure.
FC: What do you eat here that’s vegan?
W: I get their bean and rice burrito, and all the tortillas are vegan. You can make anything vegan.
FC: Both Taco Bell and McDonald’s are trying to make their food more healthy. What do you think about that?
W: Oh, I don’t believe that. I don’t believe that any of these people are doing anything healthy.
FC: So that’s not a factor in whether you go?
W: No. This is because I want a good, easy option.
FC: What would McDonald’s have to do to get you to go there?
W: If there was more stuff that’s vegetarian and vegan that I could eat, I might go. But I also just don’t like the smell of McDonald’s.
I will say their coffee is awesome, and if I’m in need I will stop for the coffee. So they’re not totally horrible.
FC: How often do you go to Taco Bell vs. a fast casual place like Chipotle or Panera?
W: Chipotle might be more like every other week.
FC: What’s appealing about Chipotle?
W: The quality. The flavor. I like real guacamole. I’ve read a lot about their brand and the CEO and I’m really behind the company, so that’s a big deal.
I think [Taco Bell and McDonald’s] are both floundering. I have a lot of friends in advertising so I’m very aware of all the data on this. I don’t know what they’re going to do.
At McDonald’s, 39 Union Square West. June 9, 2015, 1:30 p.m.
Caitlin Cullen, 23, from Flagstaff, Arizona, moved to New York three months ago
Fast Company: McDonald’s or Taco Bell?
Caitlin: It depends on the situation. If I need to have a very quick lunch I’ll go to Taco Bell. A lot of my friends are very into it because they’re good at social media. Like, if you tweet at Taco Bell they’ll tweet you back. If you Snapchat them they’ll Snapchat you back. And that’s like a one-time, super fun thing.
FC: What’s appealing about McDonald’s?
C: It’s really quick. It’s consistent. And it’s fast.
Especially in New York, there’s kind of a stigma around fast food. I would never bring McDonald’s back to the office. Everyone I work with is a lot older so they’re a lot more health conscious. They go and have a very healthy lunch, and I just want to go quick, move, get back to work.
FC: Would it improve your experience if McDonald’s had more healthy stuff?
C: Yeah. I just think it’s hard for McDonald’s to shake their current vibe that they have. It’s hard to move from this very fast food feel to something more healthy.
FC: Would you eat a kale and egg breakfast bowl?
C: I don’t think from McDonald’s. For that I’d go to a more niche type of store.
FC: What would it take for your friends who like Taco Bell to come to McDonald’s instead?
C: I do think it’s about the offering. Taco Bell is unique because they have tacos, which you can’t get at every fast food place. McDonald’s is just burgers and fries.
FC: How often do you go these places versus places like Chipotle or Panera?
C: I try to mix it up. During the week it’s really convenient for me to go to Taco Bell or McDonald’s, but I try to make it minimal because I know it’s unhealthy. I try to segment my week like that, so if I go to Chipotle it’s like “the healthy day” or something like that.
FC: If you had $10 and you could go to Chipotle or McDonald’s, which would you choose?
C: I’d go to McDonald’s. Which is bad. It’s so unhealthy, but you get a lot of food. You have some choices. At Chipotle. I always get the same thing. I wouldn’t go three days in a row to Chipotle. I would do that at McDonald’s.
Interviews have been edited and condensed.