Dine-In or Take Out? For Americans, It’s Neither — And That’s Bad News for Dining Chains
Do Americans prefer to dine-in or take-out? Increasingly, it’s neither. Outside of Chili’s unprecedented comeback, fueled by bang-for-your-buck deals and menu items, 2024 has seen Americans doing the unexpected — cooking at home. This has been tough on fast-casual brands and sit-down chains.
Order up down: Already hammered by higher labor and food costs, franchisers and restaurateurs are facing pushback on their prices and selection, leaving them with few sustainable options to attract increasingly cost-conscious consumers. To win back scarce diners, some establishments and chains are going into the red — efforts that have already pushed some to the edge.
- This year, chains like Red Lobster, Buca di Beppo, and TGI Fridays have filed for bankruptcy, looking to emerge stronger and more capable on the other end of restructuring.
- To avert a similar fate, brands like Hooters, Denny’s, and Dine Brands’ Applebee’s have been shuttering locations and paling back on costs to afford better deals.
Table Stakes
Reports from Pizza Hut parent Yum Brands, Burger King parent Restaurant Brands, and McDonald’s show that these challenges aren’t just a sit-down matter but have also spread into fast food, where brands have been introducing deals and discounts to counter a slowdown. It hasn’t been completely successful.
- McDonald’s launched its “limited-time $5 Meal Deal” in June and extended it through December — but despite an initial boost in traffic, customers are still disappointed with prices.
- Restaurant Brands’ Popeyes saw a 4% decline in same-store sales, significantly below expectations, despite new value meals — something that CEO Josh Kobza said was supposed to drive “traffic and sales improvements.”
Comeback sauce: Despite warnings from some companies about the economic environment and consumer behavior, Kobza says things have been improving — crediting lower gas prices, falling interest rates, and moderating inflation for a modest rebound in Q3. And even though brands like Yum and McDonald’s saw global same-store sales decline, their sales rose by 7% and 3%, respectively, showing that foot traffic doesn’t always mean success. We’ll have to wait and see if hungry Americans will return to eating out — or if they’re happy with what they’ve got at home.
