Sector Spotlight
Restaurant Outlook 2026
Carbon Arc Data Assets: Credit Card – US Complete Panel, Credit Card – US Detailed Panel, Menu Data, Digital Advertising, SMB Workforce
Lessons from 2025 That Will Shape Restaurant Strategy in 2026
February 4, 2026
Executive Summary
Transaction growth remained negative across QSR, Fast Casual, and Casual Dining in 2025, reflecting sustained consumer pressure rather than recovery. Margin conditions tightened as menu price increases slowed materially versus 2024, advertising intensity rose, and labor cost pressures heightened across regions.
Within this environment, results diverged by execution. Chili’s 3-For-Me delivered the strongest and most durable traffic gains, effectively positioning the brand as price-competitive with McDonald’s while preserving a full-service experience. McDonald’s promotions drove immediate transaction rebounds but showed limited durability absent price relief. In Fast Casual, Chipotle’s growth slowed as price sensitivity intensified, with price-led promotions outperforming menu innovation. Health- and protein-forward offerings emerged as an incremental growth lever, though outcomes varied sharply by brand, reinforcing brand execution as the primary determinant of impact.
Key Takeaways
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Restaurant demand remained under pressure in 2025 across QSR, Fast Casual, and Casual Dining in 2025. Transactions trended negative, while spend growth decelerated sharply.
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Operators faced intensifying margin pressure in 2025, with wages rising unevenly across regions, advertising spend increasing, and menu price growth slowing materially versus 2024.
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Chili’s 3-For-Me delivered the strongest and most durable traffic gains, sustaining high-single to low-double-digit Y/Y transaction growth across extended periods.
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McDonald’s 2025 promotions provided short-term transaction support but did not translate into sustained demand recovery, with spend and average ticket remaining pressured.
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Value sensitivity increased across all income cohorts in 2025, with the strongest response among lower-income consumers. Chili’s benefited from sustained price competitiveness, while McDonald’s relied on renewed promotions to re-engage value-oriented demand.
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Chipotle’s growth decelerated materially in 2025 as price sensitivity intensified. Menu innovation delivered episodic lifts, while value-led promotions drove the most consistent response.
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Protein emerged as an incremental but execution-dependent growth lever. Starbucks’ protein beverages drove a more sustained transaction lift than Chipotle’s high-protein menu, underscoring execution - not menu innovation alone - as the key differentiator.
Restaurant Outlook – Reviewing Macro Trends in 2025
In 2025, restaurant performance reflects consumer pressure rather than demand recovery. Transaction growth remained negative across QSR, Fast Casual, and Casual Dining, while spend growth decelerated sharply - signaling heightened price sensitivity and constrained discretionary spending. In response, the industry broadly leaned into value-led promotions to defend traffic.1
In parallel, several high-profile competitors have begun testing health-focused offerings2 - a relatively new strategic push for the category - aimed at sustaining relevance and incremental frequency rather than discount-driven demand. Casual Dining has shown comparatively stronger resilience on both spend and transactions as the value gap versus QSR has narrowed. The sections that follow examine how value and health are shaping competitive dynamics in 2025.
Exhibit 1: Transactions Y/Y Growth Quarterly (2023-2025)
Price: 149.22 Tokens
Exhibit 2: Spend Y/Y Growth Quarterly (2023-2025)
Price: 149.22 Tokens
Exhibit 3: Average Ticket Y/Y Growth
Price: 149.22 Tokens
Casual Dining: Applebee’s International, Buffalo Wild Wings, Chili’s Grill & Bar, Olive Garden, Texas Roadhouse3
Fast Casual: Chipotle Mexican Grill, Panda Express, Panera Bread, Raising Cane’s, Wingstop4
QSR: Chick-fil-A, McDonald’s, Starbucks, Taco Bell, Wendy’s5
Regional Labor Inflation and Demand Defense Shape Margin Dynamics
Labor cost pressures varied by division in 2025, with wage growth accelerating in select markets - most notably the East South Central, West North Central, and South Atlantic - while remaining more muted in others such as the Middle Atlantic and Mountain divisions. At the same time, operators are leaning more aggressively on advertising to promote traffic, particularly in Fast Casual.
Menu price inflation slowed from 2024 to 2025, with several large operators pulling back meaningfully from prior-year increases amid heightened consumer price sensitivity. These margin dynamics point to a more competitive environment where performance increasingly hinges on promotional effectiveness, marketing efficiency, and product innovation.
Exhibit 4: Quarterly Y/Y Growth in Median Full-Time Wages by Census Division (2024 - 2025)
NAICS 72251 - Restaurants and Other Eating Places
Price: requires row-level block data access, available on request
Exhibit 5: Rolling 3-month Y/Y Change in Advertising Spend (2025)
Price: not available through platform or block delivery, requires custom build
Exhibit 6: Average Menu Item Price
Price: requires row-level block data access, available on request
Casual Dining: Chili’s
Chili’s is having a moment. After years of same-store sales pressure, the brand has executed a sharp reset. As inflation pushed menu prices higher across the industry, Chili’s leaned into an aggressive, value-led strategy. Most notably the launch of 3-For-Me in mid-2022 - positioning itself directly against QSR on price while preserving a full-service dining experience.6 The result has been sustained momentum, with durable gains in both transactions and spend. Chili’s value-led promotions have resonated with different consumer cohorts in distinct ways, underscoring the brand’s ability to activate multiple generations through targeted campaigns.
3-For-Me has delivered its strongest and most sustained lift among older cohorts (Silent Gen, Baby Boomers, and Gen X), while the Triple Dipper viral moment skewed younger, with Gen Z and Millennials driving the bulk of incremental transaction growth. Together, these patterns suggest Chili’s is deploying distinct value narratives across generations, enabling broader demand capture than typically observed in promotion-heavy QSR strategies.
Exhibit 7: Chili’s Y/Y Growth (Rolling 6 Weeks)
Price: 37.05 Tokens
Exhibit 8: 3 For Me - Change in Y/Y Transactions Growth
(June ‘22 → March ‘24)
Price: requires row-level block data access, available on request
Exhibit 9: Triple Dipper Goes Viral - Change in Y/Y Transactions Growth
(April → June)
Price: requires row-level block data access, available on request
Quick Service Restaurants: McDonald’s
Amid intensifying value-led competition across both QSR and Casual Dining, McDonald’s leaned into price-driven promotions in 2025 to defend traffic.7 While these campaigns delivered short-term transaction lifts around key promotional windows, overall spend and visit growth remained muted, reinforcing a structurally challenged demand backdrop and an increasing reliance on promotional cadence to sustain momentum.
Campaign effectiveness varied by generation. The Minecraft collaboration drove a younger-skewing response, with Gen Z and Millennials accounting for the majority of incremental transaction lift. In contrast, the Monopoly promotion resonated more broadly across age cohorts, delivering more evenly distributed gains across generations. Taken together, the data suggests McDonald’s promotional strategy is effective at tactically stabilizing traffic, but recovery remains contingent on continued promotional intensity rather than durable, underlying demand improvement.
Exhibit 10: McDonald’s Y/Y Growth (Rolling 6 Weeks)
Price: 37.05 Tokens
Exhibit 11: Minecraft Promotion - Change in Y/Y Transactions Growth (Mar → Apr)
Price: requires row-level block data access, available on request
Exhibit 12: Monopoly Promotion - Change in Y/Y Transactions Growth (Sept → Oct)
Price: requires row-level block data access, available on request
Value Offerings: McDonald’s vs Chili’s
Chili’s value reset - anchored by the launch of the 3 For Me platform - has driven a clear and sustained inflection in traffic, most pronounced among lower-income cohorts. By repositioning itself as a price-competitive alternative to QSR while still offering a full-service experience, Chili’s has successfully captured value-seeking consumers trading down amid persistent inflation.6 In contrast, McDonald’s performance highlights growing elasticity at the low end of the income spectrum.
Through 2024, McDonald’s steadily pushed pricing upward, testing the upper bounds of value perception among lower-income consumers. As prices reset higher, transaction elasticity became increasingly evident, with traffic softening most acutely at the low end of the income spectrum. In 2025, a moderation in pricing demonstrated signs of stabilization, suggesting partial recovery in value-oriented demand.
Exhibit 13: Average Big Mac Meal Price by Census Division
Price: requires row-level block data access, available on request
Exhibit 14: McDonald’s Quarterly Transactions Y/Y Growth (2023 – 2Q 2025)
Price: requires row-level block data access, available on request
Exhibit 15: Chili’s Quarterly Transactions Y/Y Growth (2023 – 2Q 2025)
Price: requires row-level block data access, available on request
Fast Casual: Chipotle
As a long-standing Fast Casual leader, Chipotle has historically differentiated on food quality, value, and speed. Over the past 12+ months8, however, growth has turned largely negative as price sensitivity has intensified among economically pressured consumers. While select product launches delivered short-term lifts, the most consistent behavioral response in 2025 came from value-led promotions rather than menu innovation. The Summer of Extras campaign drove the strongest transaction lift of the year, disproportionately resonating with more income-conscious cohorts.
In parallel, Chipotle sought to capitalize on rising health and wellness demand in 2025 as consumers increasingly prioritize “better-for-you” dining options. Early performance from the High Protein Menu suggests outsized engagement among Silent Generation and Baby Boomer consumers. While not a scalable growth segment, Silent Generation response helps validate how functional menu attributes resonate when food is framed around utility rather than indulgence - providing a forward-looking lens into how aging Gen-X demand may evolve over time.
Exhibit 16: Chipotle Y/Y Growth (Rolling 6 Weeks)
Price: 37.05 Tokens
Exhibit 17: Summer of Extras- Change in Y/Y Transactions Growth (Weeks of 5/5/25 → 6/9/25)
Price: requires row-level block data access, available on request
Exhibit 18: High Protein Menu Launch - Change in Y/Y Transactions Growth (Weeks of 12/22/25 → 1/12/26)
Price: requires row-level block data access, available on request
Protein Offerings: Chipotle vs Starbucks
Protein has emerged as a key menu lever across QSR and Fast Casual,9 with brands increasingly targeting health- and GLP-1-conscious consumers. Among recent high-profile launches, Starbucks’ protein beverages drove a more pronounced and sustained transaction lift than Chipotle’s high-protein menu.
While both brands saw post-launch normalization, the paths diverged: Starbucks paired its rollout with heavy OTT and YouTube investment, whereas Chipotle relied more narrowly on YouTube.
Exhibit 19: Transactions Y/Y Growth (Rolling 6 Weeks)
Price: 37.05 Tokens
Exhibit 20: Starbucks Advertising Spend Y/Y Growth
Price: 9.24 Tokens
Exhibit 21: Chipotle Advertising Spend Y/Y Growth
Price: 9.47 Tokens
References
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Restaurant Business. “Fast-food chains intensify their value push” January 7, 2025. https://www.restaurantbusinessonline.com/marketing/fast-food-chains-intensify-their-value-push
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USA Today. “Protein is having a moment as restaurants add more options to menus” January 13, 2026. https://www.usatoday.com/story/money/food/2026/01/13/high-protein-menu-options-retailers-restaurants/88082566007/
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Fox News. “Steak beats pasta as Texas Roadhouse becomes top casual dining destination” May 14, 2025. https://www.foxnews.com/food-drink/steak-beats-pasta-texas-roadhouse-becomes-top-casual-dining-destination
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Jonathan Maze. “The 10 largest fast-casual chains in the U.S. based on system sales” May 2025. https://www.linkedin.com/posts/jonathanmaze_the-10-largest-fast-casual-chains-in-the-share-7325517588656988160-ha7Q/
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FoodIndustry.com. “Top 50 Fast Food Chains in the U.S.” November 2025. https://www.foodindustry.com/articles/top-50-fast-food-chains-in-the-u-s/
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Restaurant Dive. “Restaurant winners and losers in 2025” January 12, 2026. https://www.restaurantdive.com/news/restaurant-2025-winners-losers-taco-bell-pizza-hut-chilis-jack-in-the-box/808808/
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The Wall Street Journal. “How McDonald’s Lost Its Value Edge—and Is Trying to Claw It Back” July 24, 2025. https://www.wsj.com/business/mcdonalds-value-inflation-fast-food-38611481
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CNBC. “Chipotle stock plunges 13% as chain lowers sales forecast, says younger diners are cutting back” October 29, 2025. https://www.cnbc.com/2025/10/29/chipotle-cmg-earnings-q3-2025.html
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The Wall Street Journal. “Protein With a Side of Protein: Restaurants Change Up Menus to Lure Customers” January 30, 2026. https://www.wsj.com/business/hospitality/protein-food-restaurant-chain-406b5f2f
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