Restaurants: Bifurcation Here Too

As the summer comes to an end, we thought we’d take a look back at what has been an eventful time for the restaurant category. May was dominated by casual dining chains, notably Chili’s “3 For Me” and Buffalo Wild Wings’ All-You-Can Eat Wings promotions. That led into June, where we saw a number of QSR chains launch bundled value meals ahead of McDonald’s $5 Meal Deal, which overshadowed industry trends in July.

That leaves us with August. In addition to one the most noteworthy changes in leadership that the industry has seen in decades, another trend is starting to emerge this month: bifurcation. Like many of the stories we’ve highlighted recently, we see visitation trends remain strongest among QSR chains (where value bundles are helping to sustain traffic) and fine-dining chains (where consumers are more resilient to macro fluctuations and have resumed visits after a “July Pause”.

Where do we go from here? It’s clear that the QSR and casual dining categories will remain promotional over the foreseeable future, with McDonald’s planning for a “more permanent value program" like its previous $1, $2, $3 value menu and the return of Never-Ending Pasta Bowl at Olive Garden this week. Admittedly, there are some chains that are driving impressive visits without promotional activity–we shared some thoughts on CAVA in The Anchor last week and took a closer look at the Texas Roadhouse brand in this month’s Placer TL;DR report—but these are among a handful of exceptions across the industry. The Value Wars that have dominated the headlines across much the industry the past several months are likely to continue through the back half of 2024 and into next year.