Chick-fil-A has been on an amazing run for a long time, and last year was no different. The Atlanta-based chicken sandwich chain generated nearly $22 billion in total sales from fewer than 3,000 locations. A stand-alone Chick-fil-A generates $9 million in sales per year.
The chain has added nearly $10 billion in sales just since 2019. Put another way: Chick-fil-A basically added the equivalent of a Subway in total system sales in just five years.
It’s not rocket surgery as to why. Chick-fil-A sells quality chicken sandwiches with some of the most polite service you’ll find in the restaurant industry. The brand is routinely at or near the top in every customer satisfaction ranking you will find.
This year is no different. Chick-fil-A was the top-ranked limited-service chain, according to the American Customer Satisfaction Index.
But the brand’s score fell by two points, which the index suggested was related to prices. KFC, the No. 2 chain in the ranking, remained steady and is now just two points behind its rival.
A one-year, two-point drop in a single survey is not exactly a sign of impending doom. But it also exposes one of the primary concerns with the chain, not to mention much of the fast-food sector as a whole: Some of its customers are frustrated about prices.
For this, we go to our friends at Technomic, which surveys restaurant customers for their views on specific chains. According to the firm, Chick-fil-A’s value scores among both loyal and occasional customers have dropped noticeably since 2019.
Among occasional customers, Chick-fil-A’s value scores have fallen by 8.4 percentage points since 2019. Among loyal customers, it’s down 6.5 percentage points over that period. Overall, its value scores have dropped 7.1 points since 2019.
For a comparison point, McDonald’s value scores have improved slightly over that period. Its value scores among loyal customers improved by 1.8 points since 2019 while its value scores among less-loyal customers is down 6.5 points—a difference we believe is rooted in the company’s shift of its value offers to its app.
At Raising Cane’s, value scores are flatter, with a 1.6-point decline in overall value scores among occasional customers and a 0.1-point improvement among frequent users.
It’s worth noting that customer satisfaction ratings are certainly not perfect predictors of performance, given KFC’s sluggish performance in the U.S.
And Chick-fil-A still has higher total value scores than either of those chains and many others.
But value scores are considered a key potential predictor of performance. Technomic’s data suggests a significant shift in Chick-fil-A’s performance on that crucial measure. And that shift was broad-based, rather than of a specific group like McDonald’s.
Restaurant chains have been raising prices aggressively coming out of the pandemic, as their own costs for food and labor have taken off. McDonald’s has raised its prices 40% since 2019, about the same level as its franchisees’ costs have increased over that period.
The average price at limited-service restaurants since May 2019 is up 34%, according to data from the U.S. Bureau of Labor Statistics.
The danger from such inflation is that it would price customers out of the market and force them to look for other options, which they’ve done with frequency this year, prompting a value war.
Chick-fil-A’s value scores to us suggest that it is in danger of pricing itself out of some consumers’ consideration set.
We have no evidence of this happening, of course, and it certainly hasn’t happened yet. But even the best-performing restaurant chains in history eventually encounter a speed bump. It’s how they respond to that challenge that matters.