Olive Garden is testing lower-priced entrées with smaller portion sizes, parent Darden said, to woo consumers who are price-conscious as well as those on weight-loss drugs like Ozempic. Darden’s investments in pricing are helping it win spending from value-conscious consumers, who are looking to get more bang for their buck—and a clear idea of what a night out will cost them. While keeping prices low may hurt short-term profits, the company is confident that its value focus will position it to boost sales and take share.
Value menus are the rare bright spot in an otherwise sluggish year for the restaurant industry. Traffic related to value menus rose 1% YoY in Q2, per Circana. Overall restaurant traffic fell by 1% YoY in the same period, indicating that meal deals are getting diners to open their wallets. But as restaurants have also discovered, meal deals alone aren’t enough to get customers through the door. Instead, operators need to excite would-be diners about what they’re offering—whether by emphasizing the scale of their discounts, product or service quality, or the temporary nature of offers.
Cracker Barrel and Jaguar faced fierce backlash over recent rebrands, including criticism from Donald Trump, but their responses diverged sharply. Cracker Barrel scrapped its new logo, ended DEI initiatives, and restored traditional elements after customers accused it of abandoning its heritage. Jaguar, however, doubled down, unveiling a bold redesign and luxury EV despite Trump’s attacks, signaling a pivot toward younger, wealthier buyers. The contrast underscores how brand reinventions can either alienate loyalists or attract new audiences, with success hinging on timing, cultural awareness, and a clear long-term strategy.
RaceTrac will acquire sandwich chain Potbelly in a $566 million cash deal expected to close in Q4, with both brands continuing to operate separately. The acquisition boosts RaceTrac’s foodservice offerings at a time when convenience-store meals are driving growth, accounting for nearly 28% of in-store sales in 2024. For Potbelly, going private could accelerate its ambitious plan to expand to 2,000 shops while avoiding public market pressures. The move is a strategic play in the convenience-store foodservice arms race, positioning RaceTrac against competitors like 7-Eleven and Wawa in the battle for meal-focused customers.
Value-focused grocers are aggressively expanding as cost-conscious consumers seek affordable options, with Aldi set to open 225 US stores in 2025, Trader Joe’s adding 41, and Lidl continuing steady growth in key metro areas. Inflation pressures and lingering COVID-era costs are fueling a surge in private-label demand, which grew 4.4% year over year compared with 1.1% for national brands. These chains’ differentiated private-label strategies are driving above-average foot traffic, underscoring their appeal. The takeaway for competitors is clear: prioritize value while building unique private-label lines that strengthen margins and deepen customer loyalty.
Cracker Barrel’s short-lived rebrand—and its rapid reversal—has quickly become a cautionary tale for heritage brands navigating change.
The news: McDonald’s will reintroduce Extra Value Meals on September 8. The combo meals will deliver about 15% savings compared with buying items separately. Our take: While McDonald’s delivered better-than-expected results in Q2, including 2.5% same-store sales growth, most of its gains came from higher prices. To build momentum, the brand must shift consumer perception, not just raise prices. Bringing back the Extra Value Meal is a step in that direction.
Cracker Barrel has reversed a logo redesign just days after removing its “Old Timer” figure, Uncle Herschel, following backlash from customers, commentators, and investors. Criticism spiked when former President Donald Trump called the redesign a costly mistake but also “a billion dollars’ worth of free publicity.” Hours later, the company confirmed Herschel would remain the face of the chain. The reversal coincided with a 7% stock drop, underscoring how customer sentiment quickly impacts financials. Analysts note that tradition and heritage are powerful brand signals—removing them can sever ties with loyal customers while raising doubts about purpose and direction.
The situation: A significant share of consumers are putting eating out on the chopping block as tariffs carve into their budgets. 43% could cut back on full-service restaurants, while 42% are rethinking fast-casual, per a CivicScience consumer survey. Chains seen as pricey—or lacking a clear bang-for-the-buck—are especially vulnerable, as shown by sluggish results at “slop bowl” brands like Cava and Sweetgreen. To stay off the block themselves, restaurants from McDonald’s to Applebee’s are leaning hard into value plays. Our take: Consumers haven’t lost their appetite for dining out, but with budgets under pressure, they want to be sure they’re getting their money’s worth. Restaurants that serve up value will thrive; those that don’t could get carved up as tariffs pinch wallets.
The news: Cava invested $10 million in Hyphen, the robotics startup behind Chipotle’s automated kitchen line prototype, which Chipotle has backed. Our take: QSRs’ automation bets signal a broader shift toward augmented labor rather than outright replacement. For Cava, the upside lies in freeing employees for higher-value tasks like hospitality while improving speed and accuracy for digital-first customers. But if automation expands from back-of-house prep into other areas such as beverage dispensing and loyalty-driven upselling, chains will need to walk a fine line. Too much efficiency at the expense of the human touch risks alienating customers who still value personal connection. In the long term, the winners will be those that strike the right balance between efficiency and experience.
Brinker International and Cava Group posted diverging quarterly results, showing the split fortunes in the restaurant industry as consumers eat at home more often and become pickier about where they spend. In the current environment of economic pressure and home-shifted dining, restaurants can stand out from the crowd by making their value clear to cost-conscious consumers. Here’s how underperforming dining chains can improve: Offer value, not just lower prices. Deals like Chili’s “3 for Me” are easy to understand and come across as a genuine bargain. Try limited-time promotions for new items, or lean on nostalgia by resurrecting discontinued items. Invest in operational excellence. Well-trained staff and hospitality can encourage deal seekers to return.
Quick-service restaurants (QSRs) are no longer seen primarily as budget-friendly dining. Just 14% of consumers view them as a good value, while nearly a quarter (23%) now consider them a treat or reward, per consumer insights platform Zappi. That’s a notable shift for a category long associated with affordability. That helps explain why nearly a third (31%) of US adults have cut back spending on fast food. As inflation erodes fast food’s traditional value proposition, QSRs must sharpen their brand strategy or risk alienating diners. Brands that lean into indulgence and novelty can help position meals as a “treat,” while doubling down on affordability with compelling promotions and budget-friendly meal deals can reengage price-sensitive consumers.
The challenge: Sweetgreen is feeling the squeeze. Macroeconomic headwinds—especially in major urban markets—are prompting more cost-conscious consumers to think twice before splurging on a salad. After a second straight quarter of weak performance, the chain slashed its same-store sales guidance from flat to down between 4% and 6% for the year. Our take: With value top of mind for many consumers, Sweetgreen needs to do more than tweak pricing or portion sizes; it must convince customers that its offering is worth the premium pricing. Without a clearer value narrative, it risks losing relevance in an increasingly budget-conscious dining landscape.
The news: McDonald’s delivered strong Q2 results that topped analysts’ expectations, signaling a rebound in its core US market. Our take: McDonald’s regained its footing in Q2 after posting its steepest same-store sales drop since the pandemic. While rivals like Yum Brands and Chipotle struggled with consumer pullback, McDonald’s played to its strengths by leaning into value, nostalgia, and limited-time promotions.
Demand for food delivery strengthened in Q2, DoorDash and Uber said, as more customers become used to ordering restaurant meals and groceries online. Order frequency on Uber’s delivery platform reached all-time highs during the quarter, CEO Dara Khosrowshahi said in prepared remarks, while volumes and profitability for the unit also hit record levels. Delivery bookings jumped 20% YoY, while revenues surged 25%. DoorDash also broke records, with total orders (up 20% YoY), marketplace GOV (up 23%), and revenues (up 25%) all surpassing previous quarterly highs. Food delivery is one area that is so far immune to uncertainty—a sign that consumers are increasingly wedded to services that offer convenience, and are willing to pay a premium (or at least a membership fee) to get food and other goods delivered quickly to their doors.
Coach plans to open more than 20 of its Coach Coffee Shops in retail and outlet stores this year, per Business of Fashion. There’s a reason so many luxury brands are turning to hospitality concepts: They are an excellent way to get shoppers through the door, and to keep them spending—even if it’s just on a cup of coffee or branded baseball cap.
The news: Yum Brands Q2 earnings and revenues fell short of analysts’ expectations. Our take: Despite Yum Brands’ efforts to sharpen its value proposition, economic uncertainty still took a bite out of its performance. Consumers are thinking twice about where and when they eat out amid growing concerns over tariffs and a weakening labor market. That caution is hitting nearly every quick-service chain, from Chipotle to McDonald’s, and Yum Brands isn’t immune.
Starbucks will rely on kiosks to shorten wait times at high-traffic locations like airports and hospitals, per a Bloomberg report. For all Starbucks’ talk about building the community coffeehouse, it recognizes that service, speed, and reliability are integral to keeping customers engaged with the brand. While there are other pillars the company needs to execute to complete its turnaround, being able to deliver efficient service when it’s needed most will bolster its reputation for reliability and encourage more frequent visits.
The trend: Protein is having a moment. Some 44% of US consumers—and 51% of Gen Z and millennials—are actively trying to boost their intake, turning protein into a must-have across categories. Our take: Protein-rich, better-for-you products are proving to be a rare bright spot amid a challenging consumer landscape. Shoppers—especially younger, health-conscious ones—are still willing to pay a premium when the nutritional value feels worth it. For CPG brands and foodservice chains, protein is a high-impact lever to drive growth and relevance. But sustaining that momentum requires more than a nutrition label. If the taste, format, or experience falls flat or feels like a gimmick, consumers won’t hesitate to walk away.
The situation: Despite logging a sixth consecutive quarter of negative comps in FY Q3, CEO Brian Niccol—who famously steered Chipotle out of its food‑safety crisis—said Starbucks’ turnaround is running ahead of schedule. Our take: While it’s encouraging to see Starbucks take some small steps in a positive direction, the road is still steep. Consumers remain price‑sensitive, agile rivals in the US and China are taking multiple paths to steal share (both value‑led and trend‑driven), and commodity costs are rising. To break out of its sales slump, Starbucks must execute on four fronts: Make service faster and better. The chain needs to speed up service without sacrificing the high-touch hospitality that Niccol is seeking. Find ways to differentiate. It’s easy to roll out new offerings, but it's hard to develop unique beverages that consumers will clamor for rather than recoil at (who can forget Starbucks’ Oleato line of olive oil-infused drinks?). Lean on technology. Refreshing Starbucks’ Rewards program and revamping its app are proven tools to drive occasional customers back into its stores. Stabilize China. Price cuts may lift traffic, but Starbucks needs to balance volume gains against margin erosion and fend off lower‑priced competitors such as Luckin. Nailing these pillars—speed, product innovation, tech‑powered engagement, and a calibrated China play—will determine whether early green shoots turn into sustained growth.