"Many American consumers are feeling the pinch, and it's affecting how they shop, and where and how often they dine out. Consumer sentiment is down, are on the rise, and dining out has become pricier as operators contend with higher labor, ingredient, and rent costs. People are looking for value - but not necessarily the cheapest option - through loyalty perks, portion sizes, and perceived quality."
"Chili's has been leading the way here and outperforming rivals like Applebee's. The Tex-Mex chain, which also serves American classics like burgers and fries and is owned by Brinker International, reported a 21% surge in sales for the most recent quarter. Analysts say it was quick to capitalize on rising fast-food prices, offering deals such as its $10.99 Big Smasher burger."
"At the same time, tighter budgets and hybrid working have also been reshaping midday dining. Pricier lunch spots, such as Chipotle, said they are losing out as people choose to eat at home. "For occasions like lunch, people are substituting things like eating at home, bringing in food from home, or finding cheaper local alternatives," GlobalData Retail analyst Neil Saunders told Business Insider. Lower-cost grocery chains may be benefiting from this."
Consumers are cutting back on dining out as prices rise and budgets tighten. Restaurants face higher labor, ingredient, and rent costs, pushing operators to compete on value through loyalty perks, larger portions, and perceived quality rather than just low prices. Casual-dining chains such as Chili's are gaining market share by simplifying menus, overhauling marketing to appeal to younger diners, and offering value items like a $10.99 Big Smasher burger, producing strong sales growth. Fast-casual and pricier lunch spots such as Chipotle are losing midday traffic as more people eat at home or bring packed lunches. Lower-cost grocers are benefitting from the shift.
Read at Business Insider
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