The trend: Restaurant demand is proving uneven as consumers demand better value and stronger service when dining out.

• Applebee’s same-store sales fell 0.4% YoY in Q4 2025, but IHOP’s increased by 0.3% in the same period, parent Dine Brands said.
• Outback Steakhouse operator Bloomin’ Brands’ posted its first quarter of positive traffic in four years in Q4, but The Cheesecake Factory recorded its first same-store sales decline since Q1 2024.

The contributing factors: Bad weather, the government shutdown, and softer consumer sentiment contributed to restaurants’ mixed Q4 performances. Diners’ focus on value is both an opportunity and a headwind, with value menus driving traffic for chains like The Cheesecake Factory and Outback Steakhouse but compressing check sizes as consumers keep a tight grip on spending.

However, customers’ definition of value is changing. While price is still paramount, diners are equally focused on the “vibe” of a restaurant, according to Dine Brands CEO John Peyton. As dining out becomes more of an indulgence, consumers want an experience that is fun, entertaining, and offers high-quality service.

Operators are responding:

• Bloomin’ Brands aims to fulfill those expectations by increasing servers during peak times by 50% and reducing the ratio of tables to servers to 4:1 from 6:1.
• IHOP is working to improve service speed and restaurant cleanliness while leaning on marketing campaigns to position itself as a community gathering place.

Implications for the restaurant industry: Consumers’ higher standards for dining out is both an opportunity and a challenge for restaurant operators. Food quality and portion sizes rank as the biggest sources of disappointment among US adults following restaurant visits, alongside service quality and cleanliness, according to a January McKinsey survey.

Companies that can deliver a high level of service alongside reasonably-priced menu items stand a better chance of driving traffic and sales in this uncertain environment. But delivering a consistently excellent experience—both in terms of service and food quality—is an expensive undertaking, requiring sizable investments in labor and restaurant infrastructure.