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A Volatile Year Sets the Stage for 2026
What should restaurant operators expect in 2026? Like much of the consumer sector, 2025 was an up-and-down year for the industry. The year started out on a strong note, but visitation trends quickly turned volatile amid uncertainty over tariff news and broader macroeconomic uncertainty. With the threat of higher prices, it’s no surprise that consumers became hyper price sensitive as the year progressed, resulting in a clear bifurcation in trends among diners.
On one hand, affluent consumers – who generally take their spending cues from the health of the stock and housing market – continued to visit more upscale and fine dining chains. Meanwhile, lower and middle income consumers pulled back from QSR and fast casual restaurant chains that they perceived as expensive. This set up a challenging development for many restaurant operators, as consumers traded out of traditionally lower-priced restaurant channels for substitutes across other food retailers. This trend continued for much of the year until McDonald’s and others introduced more value-oriented promotions with pop-culture tie-ins (which we discussed here).
Heading into 2026, where does the restaurant category stand? We’ve highlighted three key trends that restaurant operators, executives, and investors should consider.
1. The Return of Value Wars
As mentioned above, traditionally lower-priced restaurant channels generally had a challenging 2025 headlined by increased competition with other food retailers like value grocers like Trader Joe’s and Aldi, food-forward convenience stores like Wawa, Sheetz, Buc-ee’s, and Casey’s, and warehouse clubs like Costco and Sam’s Club (which have increasingly attracted younger visitors in recent years). In fact, our data suggests a substantial increase in the percentage of QSR visitors also visiting Aldi – and while some of the increase may be attributed to Aldi's expansion, the rise in cross-visitation trends also underscores this competitive encroachment.
While certain players like Taco Bell were able to hold their ground against other food retail competitors, others – like McDonald’s – needed the boost from special promotions like the launch of its Extra Value Meal in September 2025 to win back value-focused consumers.
What's Next for QSR?
We’ve already covered some of the key ways that QSR chains plan to wield promotional strategies in 2026, including a focus on freebies, pop-culture tie-ins, sequencing, and storytelling. We’re already seeing some evidence of this with Taco Bell’s Luxe Value Menu featuring 10 menu items priced at $3 or less. However, with several key events taking place in 2026, including the Winter Olympics and World Cup, there will be more opportunities for QSR chains to amplify their value messaging. We may not quite see the return of the Value Wars of 2024 given ongoing input cost inflation pressures, but given the success that McDonald’s and Taco Bell have seen, it’s apparent that value messaging will be critical in 2026.
2. The Fight for the Middle-Income Consumer
As macroeconomic and inflationary uncertainty increased throughout 2025, restaurants’ primary competition shifted from other chains to alternative food retail channels, including value grocers, convenience stores, warehouse clubs, and dollar stores. Chipotle CEO Scott Boatwright noted this trend on the company’s Q3 2025 earnings conference call as well. While Chipotle noted pressure among customers under $100K in household income from July-September, our data also indicated a major shift in the behavior of fast casual restaurant consumers in trade areas between $100-$125K for much of the second half of 2025.
Increased Competition with Differentiated Food Retailers
Where did these consumers go? Like for QSR chains, we believe visits were impacted by a combination of factors – including a shift to differentiated food retailers like Trader Joe’s. Below, we see the percentage of fast casual visitors that also visited Trader Joe’s has increased significantly over the past five years. Like for Aldi, some of this can be attributed to Trader Joe’s expansion plans, but we believe that some visitors have chosen to substitute some fast casual lunch visits for value grocers.
How Can Limited Service Concepts Win Back Consumers in 2026?
After years of outperforming the industry, these high-growth brands face a "convenience plateau." The price gap between fast-casual and casual dining narrowed to the point where consumers began questioning the value of a $16 bowl eaten at a counter versus a $20 sit-down meal. To win back these consumers in 2026, fast-casual brands must reinvest in the physical experience. This means moving away from "ghost kitchen" vibes and back toward inviting dining rooms, while simultaneously fixing the "mobile order friction" that has made many store lobbies feel chaotic and impersonal.
Both QSR and fast casual chains looking to win back middle-income visitors who have traded down to at-home dining will need to move beyond the $5 value meal. The winners in 2025 realized that value is a calculation of price combined with innovation. McDonald’s "Grinch Meal" and various "limited-time" spicy chicken iterations proved that consumers are willing to spend if the product feels like a unique event. In 2026, restaurants must continue this trend, using "innovation-led value" to justify the discretionary spend of a household that is increasingly selective.
3. Casual Dining’s Resurgence: The Chili’s Effect
One of the standout stories of 2025 was the continued strength of casual dining giants like Chili’s. Building on the momentum gained in 2024 with the "Big Smasher" burger and clear value messaging (like the "3 for Me" deal), Chili’s didn't just win new customers – it kept them. Data shows that same-store visits to Chili's were up every month of 2025 despite the tough comparison to an already strong 2024.
FSR Concepts Taking a Page Out of Chili's Playbook
Observing Chili's successful resurrection through its aggressive "3 for Me" platform and direct antagonism toward fast-food pricing, rivals like Applebee's and Red Robin are frantically adopting the same playbook to win back budget-conscious diners. These chains have largely abandoned complex culinary innovations in favor of simplifying operations and launching hard-hitting tiered meal deals – often priced between $10 and $12 – designed to explicitly undercut the rising cost of a "Big Mac" combo.
By pivoting their marketing to highlight that a sit-down meal with unlimited sides now costs less than a drive-thru visit, competitors are validating Chili's core thesis: the new battleground for casual dining isn't service or ambiance, but proving they are the superior economic alternative to the quick-service sector.
From Broad Growth to Precision Execution in 2026
Ultimately, 2026 will be defined by precision rather than broad-stroke expansion. The 'rising tide' era of post-pandemic growth is over; simply opening doors in high-growth Sunbelt markets or offering a generic discount is no longer enough to guarantee traffic. To succeed in this increasingly saturated and price-sensitive environment, operators must execute a delicate balancing act: aggressively defending their value proposition to fight off grocery competitors, while simultaneously reinvesting in the in-store experience to justify the visit. Whether it is through the tactical 'sequencing' of limited-time offers, the aggressive tiered pricing of casual dining, or the revitalization of physical dining rooms, the winners of 2026 will be the brands that give consumers a distinct, irrefutable reason to choose dining out over staying in.
For more data-driven dining insights, visit placer.ai/anchor.
Placer.ai leverages a panel of tens of millions of devices and utilizes machine learning to make estimations for visits to locations across the US. The data is trusted by thousands of industry leaders who leverage Placer.ai for insights into foot traffic, demographic breakdowns, retail sale predictions, migration trends, site selection, and more.
