Economic conditions are driving consumers to spend less on dining out, with about one-third cutting back on restaurant meals. Fast food chains like McDonald's, Chipotle, and Wendy's are experiencing declines in sales and traffic due to perceptions of high pricing. In contrast, sit-down restaurants such as Chili's and Cheesecake Factory are gaining popularity by offering perceived greater value for similar prices. Chili's reported a notable 24% increase in same-store sales and a significant rise in customer traffic, credited to enhancements in its menu and marketing strategy.
Consumers are tightening their belts and eating out less frequently, but sit-down restaurants like Chili's and Cheesecake Factory are persevering because they're delivering more value for about the same price as fast food.
Chili's has led the charge with a 24% jump in same-store sales in its most recent earnings report. Guest traffic at Chili's locations also increased by 16.3% over the quarter.
McDonald's CEO Chris Kempczinski recently hinted its customers see fast food as too expensive, even as the company has doubled down on value deals.
About one-third of Americans said they've cut back on eating out and food delivery since the start of the year, according to market research firm Ipsos.
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