Casual dining in 2024 has been dramatically transformed by inflation, changing consumer priorities and fierce competition between fast food giants and grocery stores.

The prices for dining out are rising rapidly 3.6% According to the Labor Department’s Consumer Price Index (CPI), last year many consumers reconsidered their eating habits and opted to prepare more meals at home. Although food prices were generally cheaper, they also increased by 1.6% during this period.

This confluence of factors has resulted in a year mixed results for the casual dining area. Some brands have successfully navigated these challenges while others struggled to adapt. However, one constant has emerged: value remains first. As 2025 approaches, restaurants will need to offer compelling promotions to be successful.

“We saw a consumer who is value-oriented, but looking for innovation,” said RJ Hottovy, head of analytical research at pedestrian traffic analytics firm Placer.ai, in an interview with Quartz.

In order to attract price-conscious guests, many chains engage in heavy “Values ​​wars“,” Advertise aggressive promotions. Chilies (EAT+0.19%)This trend was successfully used, for example, with the popular “3 for me” act. This was the case McDonald’s meal deal for $5whatever proved that it was so highly successful.

However, consumers don’t just strive for the lowest prices. They crave it too new experiences and menu items. Hottovy notes that chains like ChipotleCava (CAVA-2.31%) and Sweetgreen (SG-1.39%) have increased sales by introducing new menu items and flavors. Chipotle’s (CMG-0.97%) reintroduction For example, the Chicken Al Pastor and Beef Barbacoa products proved to significantly increase sales. McDonald’s (MCD-1.09%)Taco Bell (Yummy-1.07%) and Wendy’s (WHO-1.33%)are also prime examples of this approach and, in addition to time-limited offers, also offer cheaper offers. According to a Numerator report, the three chains are being considered cheaper options as food in all income cohorts. In particular Olive Garden (DRI-0.32%) and Longhorn Steakhouse are also seeing an upswing. The restaurants are among this year’s Casual Dining winners.

Earlier this year McDonald’s collectible cups became so popular Customers started selling them on third-party websites like eBay for up to $100. Wendy’s SpongeBob themed bundlein which a Pineapple under the frosty seawas also well received by consumers, despite online criticism of the campaign didn’t live up to the hype (that is, aesthetic). Meanwhile, Taco Bell’s Decade menuwhich has been bringing back classic items since the chain’s founding in 1962, used its strong brand identity to attract nostalgic guests.

The formula for success – convincing value And innovation – didn’t work for every chain. Higher food costs, declining foot traffic and rising labor costs have created a problem difficult operating environmentespecially for smaller and regional chains. Many face an uphill battle in the face of these economic headwinds.

According to Hottovy, we can expect this More bankruptcies in 2025especially with chains that couldn’t adapt quickly enough. Red Lobster, for example, faced major challenges Experts doubt its long-term viability and whether it can do that revitalize his brand and offer customers more added value. Since emerge from Chapter 11 bankruptcyThe seafood chain has made numerous changes including Discontinuing the $20 Endless Shrimp promotion and reduced the menu. Under CEO Damola Adamolekun and a $70 million budgetThe chain plans to increase the number of employees and upgrade its restaurants with better lighting.

Meanwhile, TGIF Fridays has also had a challenging year Sales are stagnating and foot traffic is declining since early 2024. The once-popular American-style restaurant struggled to compete with more modern establishments like Chili’s and still failed to attract younger customers various advertising measures.

As traditional chains struggle with declining foot traffic, chicken is one of the big winners in casual dining this year. Chains like Raising Cane’s performed particularly well, according to Hottovy, likely due to the growing trend of consumers choosing menu items they see fit healthieroften swapping chicken for red meat. Chicken also offers more cost-effective Alternative for restaurants compared to beef products. Taco Bell, for example, recently launched Chicken nuggets as a limited time offer.

The beef industry has faced unique challenges, most notably the impact of the E. coli outbreak at McDonald’s, where chopped onions sickened hundreds of customers. This event significantly impacted McDonald’s, which holds almost half of the burger market according to Barclays, and resulted in a decline in customer traffic. The introduction of the $5 meal deal in October helped mitigate the effectsMcDonald’s acknowledged the long-term consequences of the outbreak. To accelerate the recovery process, the company announced a $100 million investment in marketing and franchisee support measures in November.

Beyond pressures within the restaurant industry, grocery stores have become formidable competitors, and consumers are also turning to retailers Aldi and Trader Joe’s for their grocery needs. With grocery prices still 2.4% higher, according to CPI data, these options represent a more attractive alternative for budget-conscious families, especially those looking for items that don’t cost a lot. Walmart (WMT-1.02%) can also be summarized in this category. The retail giant has seen alongside Aldi and Trader Joe’s massive gains this year from private label offerings.

In 2025, the key to success in the casual dining sector will likely continue to be a combination of value and innovation. Chains that offer affordable options with exciting new products, flavors and dining experiences are likely to thrive. The growing interest in unique sauces and new menu items, such as at McDonald’s McRib, along with his 1/2 gallon jug of McRib sauceindicates a strong appetite for fresh culinary experiences. Collaborations with entertainment brands – such as Starbucks’ youngest Moving to China – are also likely to play an important role in attracting and retaining customers.

“As we have seen in 2024, simply enticing customers with a good offer is not enough,” Hottovy said. “To keep them coming back, restaurants need to offer innovation in addition to value for money.”