Fast Food Went All In on Value, Then Inflation Called the Bluff
Racing to the bottom has a floor, and fast food executives are finding out why. Chains launched a value menu arms race as consumers pulled back, only for rising ingredient costs and war-driven inflation to squeeze margins from the other side. Even Kraft Heinz’s CEO admits that consumers are “literally running out of money,” but not every chain is bleeding.
- Inside the pizza wars, real casualties have emerged — Papa John’s North America same-store sales plunged 6.4%, echoing a miss from Domino’s just days earlier.
- Even Shake Shack wasn’t spared — shares cratered over 28% as record beef prices and soft consumer traffic pushed the chain to a surprise quarterly loss.
Playing differently: Despite the carnage, a handful of names are actually navigating this well, and their playbooks look nothing alike. McDonald’s beat on EPS and revenue, with same-store sales rising as customers actually spent more per visit. Krispy Kreme is taking a different route, leaning into re-franchising and third-party distribution rather than competing on price. What links them isn’t a discount, but just being the easiest choice when a wallet finally opens.