After several years of inflation pressuring menu prices, things cooled a bit in Q1. According to Technomic data, overall inflation was less than 1% during that time frame, versus the 2.5% average.
That is certainly welcomed news for price-fatigued consumers.
“What we’re seeing now is a bit of settling as we get into 2026,” Technomic Senior Director of Syndicated Research Heather Nelson said during a recent strategic pricing insight session.
Nelson said inflation rates vary more by cuisine than service type, with steak concepts generating the highest inflation at 1.5% in Q1 as beef prices flirt with historic highs. Though there has been some relief on wholesale beef prices, they remained 14% higher year over year in Q1 and are expected to increase by 8% overall for the full year.
This has impacted not only steak concepts, but also chains with varied menus, such as Applebee’s and Chili’s, which also saw higher inflation than segment averages. Higher beef prices have of course also eroded the burger segment’s value perception. Burger prices were up 4% in Q1 versus Q1 2025.
“Consumers were beginning to have a bit of sticker shock as their prices in the burger segment edged higher,” Nelson said. “So, there was a lot of value play at the end of last year as they sought to retain traffic, and we’re continuing to see burger players reevaluate and modify their pricing strategies.”
For example, Burger King promotes tiered pricing for its signature Whopper through its junior, double, triple, and standard sizes. The average price of a Whopper Junior is $2.77 less than the average single patty Whopper, Nelson said, while adding a second patty is an additional increase of $1.75, while adding a third patty for a triple Whopper is an incremental $1.09.
“The price increase between the Whopper and the double is larger than the delta between the double and the triple there, and in comparison to specialty burgers, Burger King offers other varieties of the Whopper, like the Bacon Cheddar Hash Whopper (which is in test) or the Deluxe Steakhouse Whopper. Those tend to be priced in a similar tier that aligns with the Triple Whopper in about that $9 range,” Nelson said, adding that limited-time offers such as last year’s SpongeBob Krabby Whopper was priced at $7.51 on average, or between the Whopper and Double Whopper.
Tiered pricing strategies have become far more common amid the intensified value environment, with other examples such as Taco Bell’s Luxe Value Boxes, Wendy’s Biggie lineup, and KFC’s Box Feasts.
However, Rich Shank, Technomic senior principal and VP of Innovation, said these programs could potentially be less effective this year.
“We saw the introduction of these tiered value programs that saw some success mid-year, and some brands are still riding some success there, but we also saw a huge influx of those tiered value programs that have cluttered the market, and so getting attention with those this year is going to be harder than ever,” he said. “We think there's going to need to be some innovation happening around what the next big thing in the value program looks like, because they have been driving positive growth for some chains, but some of the people who've been mimicking those programs haven't seen the same success, so we might need to rethink what that looks like this year.”
He believes there is going to be a value proposition “reset” this year, similar to what McDonald’s did last year with its evolution from $5 Meal Deals to a McValue Platform to Extra Value Meals. That reset requires understanding how the core menu sits with the consumer base, what’s driving traffic, and how to balance the right price without losing net margin.
“That is going to be a really big assessment this year that we need to figure out,” Shank said.
He said it’s critical to understand the competitive pricing landscape: Know where you sit relative to your market on pricing and also know what your customers are willing to spend on each item.
“Setting the value proposition is always important, but today it’s of heightened importance. We are in a market full of sluggish transactions. We are trying to find the next transaction at the expense of our competitors, so there is a lot of price competition,” Shank said. “It’s important that you understand what your customers are willing to spend, and how your past pricing actions have impacted your business.”
Once you’re able to define those risks, you can create a more effective strategy, but Shank cautioned that the broader environment is expected to remain soft in the near term with consumer sentiment at its lowest point since 2014.
“That is a pretty big watch out for what traffic might look like over the next couple of months,” he said. “Household financial stress is driving that. There’s an expanding wealth gap — not just between the rich and poor, but … the health of the middle class is going to be important to watch to make sure our customers are in the best position to spend.
“Keeping your eye on what’s going on is going to be important to see how you might need to navigate potentially choppy waters in your local markets.”
Contact Alicia Kelso at Alicia.Kelso@informa.com
Follow her on TikTok: @aliciakelso
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