Millennials Like Fast Casual, But They Like C-stores More

CHICAGO — Move over fast-food restaurants, convenience stores are moving up the list of go-to dining options among Millennials.

According to new research from The NPD Group, Millennials are moving from fast-food outlets to fast-casual ones like Chipotle, as well as to convenience stores. The NPD analysis was first reported by USA Today.

Convenience stores are almost twice as important to Millennials for food and beverage stops as fast-casual restaurants, said Harry Balzer, chief food industry analyst at NPD.

"Millennials are cheap — they're no different from anyone else," he said. "What we mostly do in our lives is get food as fuel — we don't usually go out for exciting eating adventures."

Notably, the convenience channel accounted for 11.1 percent of Millennial food and beverage stops in 2014, compared to 7.7 percent in 2006. By comparison, fast-casual accounted for 6.1 percent in 2014 vs. 3.1 percent in 2006, according NPD's annual Eating Patterns in America study.

This could spell trouble for fast-food chains. As Millennials opt for convenience stores, and fast-casual chains grow, fast food is getting squeezed from above and below in price, Balzer said.

"They've discovered that you can eat out at the convenience store," he added.

Jeff Lenard, vice president of strategic industry initiatives for NACS, the Association for Convenience & Fuel Retailing, told USA Today that Millennials are more likely to stop and buy items — particularly food items — at convenience stores than any other age group.

"That's why the future of convenience stores is food — not gas," Lenard pointed out.