It was the summer of value in the restaurant industry as many chains launched low-priced meal deals to appeal to customers on a budget.
It followed several years of aggressive menu price increases that have led to traffic problems across much of the industry as consumers shift their spending to cheaper options.
And while quick-service chains have been the most aggressive in flashing their value, the real winner to emerge from the affordability race may be casual-dining chains, which are now viewed by consumers as a better value than their quick-service counterparts.
That’s according to research from data firm YouGov, which shows that casual dining’s value perception has climbed over the past year while fast food’s has plummeted.
The trend represents a complete reversal from four years ago, when fast food had a value ranking of 8.7 out of 10, while casual dining sat at about 7.7.
As of Sept. 26, casual dining had a rating of 7.8, while fast food had fallen to 5.2.
According to YouGov data, fast-food value perceptions began to decline in mid-2022. That’s around the time when many restaurants began raising menu prices to offset inflation in food and labor.
Casual dining’s value perception started falling then, too, but not as sharply. That may be because fast-food prices have consistently risen faster than full-service prices.
In August, for instance, limited-service menu prices were 4.3% higher than a year ago, while full-service prices were 3.8% higher, according to the Bureau of Labor Statistics.
By early last year, casual dining began to see some clear separation from fast food in terms of consumers’ value perceptions. Then it really began to gain steam at the start of 2024. QSRs’ value campaign this summer apparently did nothing to close the gap. In fact, value perceptions of both casual dining and fast food actually declined from May through August, according to YouGov.
Casual-dining brands have been promoting value, too. Chili’s has attacked fast-food chains directly with its $10.99 3 for Me combo, and others have gotten in on the action with affordable limited-time offers, such as 50-cent boneless wings at Applebee’s and all-you-can-eat boneless wings at Buffalo Wild Wings.
Casual dining may also be benefiting from forms of value that go beyond price. For instance, sit-down restaurants offer a more immersive experience than fast food, which can translate to value for customers. They also tend to serve alcohol and offer larger portions. Combine all of that with the fact that full-service prices have not risen as steeply, and you see why customers may feel like they’re getting more bang for their buck in casual dining.
Among restaurants tracked by YouGov’s BrandIndex, Olive Garden had the best value score at 25.8. That was followed by Domino’s (25.2), Cracker Barrel (22.9), IHOP (21.7) and Dairy Queen (21.1).
Wendy’s (20.6) is the only fast-food chain, as defined by YouGov, in the top 10 for value.
But the overall rise in casual dining’s value perception is being driven by brands further down the list. For instance, The Cheesecake Factory, First Watch, Chili’s and Bahama Breeze all saw improvements in their value scores over the past year. Of that group, Cheesecake saw the biggest jump, going from a score of 5.8 to 9.8.
Meanwhile, fast-food chains dominate the list of brands with the poorest perceived value. Starbucks leads the way with a score of -11.8. Others include Long John Silver’s (-0.9), Quiznos (-0.5) and Carl’s Jr. (-0.1).
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.