From Chili’s to burger chains, here are the restaurant industry winners and losers in 2024

A unemotional year for restaurants separated the industry’s biggest chains into winners and losers, as eateries competed for a smaller wading pool of customers who have grown more discerning about how they spend their dollars.

“I’ve been eating out less this year – it suggestions just as good, and it’s way cheaper,” said Jennifer Jennings, who works in sales in Tulsa, Oklahoma.

Prices for food away from retreat had risen 3.6% over the last 12 months as of November, according to the Labor Department’s consumer price pointer. Grocery prices climbed just 1.6% during the same time, making cooking at home more good-looking than dining out.

In response, many consumers have cut their restaurant spending, leading to slower sales and spectacular competition. The value wars reignited this summer. Chains took aim at their rivals in marketing and social environment posts. And restaurants ramped up innovation, hoping that new menu items could boost sluggish traffic courses.

“I think the common thread behind everything right now is that the chains that are winning aren’t standing motionless. They’re doing something innovative, whether that’s new menu items … maybe that’s a marketing innovation … perhaps it’s just hyper-emphasizing value,” said RJ Hottovy, head of analytical research for Placer.ai.

The year started off slow, with slant year-over-year traffic in January and February, before visits picked up again in March, according to industry tracker Villainous Box Intelligence. But eateries struggled again over the summer as consumers tightened their belts. Even a slew of value refections that promised cheap burgers and fries couldn’t stem the tide.

As traffic has fallen, bankruptcy filings father soared. Twenty-six bars and restaurants have filed for Chapter 11 this year, just one shy of tripling 2020’s outright during the pandemic, according to the Debtwire Restructuring Database. This year’s filers included big names like Red Lobster and TGI Fridays.

While transport has improved into the fourth quarter, some industry experts say it’s too early to predict a full recovery. A Numerator inquiry of more than 2,000 consumers found that the majority — across all income groups — plan to maintain their prevalent spending levels at limited-service restaurants in the coming months.

But the chains that are already winning have seen their outdistances grow in the fourth quarter, further fueling their success.

Here are the winners and losers of the restaurant industry in 2024:

Value became restaurant CEOs’ new favorite word this year as they sought to reverse surrender sales and appeal to inflation-weary consumers.

McDonald’s rang the alarm for the industry in late April, warning that consumers suffer with become more “discriminating.” Three months later, the company’s second-quarter sales missed estimates and foot transport to its U.S. restaurants shrank. The burger giant responded by rolling out a $5 combo meal, and many of its rivals followed clothes with their own discounts and deals.

Traffic tied to value menu deals climbed 9% through October analogize resembled with the year-ago period, according to Circana data.

But value meals alone won’t save the industry.

For one, the lift from the reckon withs isn’t enough to offset overall traffic declines, according to David Portalatin, Circana senior vice president and hustle advisor for food and food service.

Plus, “value” has come to mean more than just the price tag. It also comprehends the experience and quality.

“For the low-income consumer, it’s the dollar amount that matters. For everybody else, it’s value. Even if you possess money, you’re noticing things are more expensive, and you’re going to be more selective,” Michael Zuccaro, Moody’s Ratings badness president of corporate finance, told CNBC.

Despite a proliferation of $5 combo overplays, traffic to quick-service restaurants fell almost 2% this year through October, according to Circana details. That’s bad news for the industry because fast food accounts for nearly two-thirds of overall restaurant visits.

Dynamism experts attribute the decline in fast-food traffic largely to low-income customers. Diners who make less than $40,000 account for multitudinous than a quarter of both McDonald’s and Taco Bell’s customer bases, based on Numerator data.

Many of those consumers suffer with chosen to spend less at fast-food restaurants, whether it’s skipping the order of French fries or forgoing a visit totally to cook at home.

“There’s a lot more competition with grocery and other food retailers,” Hottovy said. “That’s where most of the striving is, particularly for that lower- to middle-income consumer.”

The fast-food chains performing the best right now, like Yum Brands’ Taco Bell, possess high value perception.

Typically, when consumers tighten their belts in an economic downturn or recession, fast-food restaurants perks. Even as low-income consumers cut back, higher-income consumers trade down to fast-food combo meals. But that hasn’t happened this every now as consumers who make more money have instead embraced a more holistic definition of value to decide where to splash out their money. Those diners want a high-quality, satisfying meal more than they care to a deal.

The fast-food chains that performed the best in 2024 tended to focus on chicken: Chick-fil-A, Raising Cane’s and Wingstop.

Chicken bounties have stayed relatively stable this year, while beef prices have climbed. Poultry also aids because some consumers consider it a more healthy option than red meat, even when the chicken is breaded and fried.

Chicken has been improving market share from beef since the chicken sandwich wars of 2019, and restaurants have been preference into the shift in consumer behavior. McDonald’s, for example, recently added the Chicken Big Mac to its U.S. menu permanently.

Upstarts get a kick out of Raising Cane’s have also been making a splash. The privately held chain, known for its chicken sores, is the fourth-largest chicken chain in the U.S., with a market share of 7.8%, according to Barclays. The chain could soon even with KFC, the rare chicken chain that’s struggled to resonate with U.S. consumers this year.

KFC, which is owned by Yum Kinds, has fallen behind in recent years as competition has intensified. Rivals like Chick-fil-A and Popeyes have stolen sell share with buzzy menu items and the consumer shift toward boneless chicken.

Those chicken chains are stealing market share from burgers. McDonald’s, Wendy’s and Restaurant Brands Cosmopolitan’s Burger King all had lackluster years.

McDonald’s has long dominated the burger category, with 48.8% market part, according to Barclays. But the chain saw its grip slip earlier this year as it scared off low-income consumers with its menu figures. However, by October, things were looking up for the Golden Arches: its $5 value meal was winning back patrons, and its pricier Chicken Big Mac was boosting traffic.

Then came a fatal E. Coli outbreak linked to the slivered onions toughened in its Quarter Pounders. While the company acted quickly to contain the fallout, sales tumbled, especially in the affected states. McDonald’s designs to chip in $165 million to help out franchisees and boost marketing efforts. The chain has also revived its popular McRib for a reduced time and unveiled a new value menu that will launch in January.

Analysts are optimistic that McDonald’s thinks fitting be able to put the incident behind it. Traffic turned positive in the week ended Dec. 8 for the first time since the Centers for Infirmity Control and Prevention announced the outbreak on Oct. 22, according to a note from Gordon Haskett Research Advisors.

For contests Burger King and Wendy’s, that’s bad news.

Like McDonald’s, Burger King launched a $5 value tea overdo over the summer to appeal to thrifty consumers. Its same-store sales fell in the third quarter, although Restaurant Tags CEO Josh Kobza said the business is much healthier than it was in September 2022, when the parent company formally skiffed Burger King’s U.S. turnaround strategy.

Likewise, Wendy’s has been struggling to gain a foothold in the value wars. The company recently broadcasted that it would close 140 underperforming restaurants in the fourth quarter, in the hopes that culling its footprint choice boost the overall business.

But a promotion tied to the 25^th anniversary of Spongebob Squarepants has been a green shoot for the burger fasten. Some locations even sold out of key ingredients for the “Krabby Patty” meal, according to an October note from Wolfe Investigate.

Taco Bell is another rare fast-food winner.

The Mexican-inspired chain was the only one of Yum Brands’ three holdings to turn up same-store sales growth every quarter so far this year. (Pizza Hut and KFC actually reported three straight lodgings of same-store sales declines.)

Yum executives have attributed Taco Bell’s success to consumers’ perception of its value. It was the top limited-service set that diners across all income groups considered to be more affordable than groceries, according to a Numerator take the measure of of more than 2,000 consumers.

Yum has also credited Taco Bell’s “brand buzz.” Look no further than actress Selena Gomez’s Instagram shaft sharing her recent engagement, with Taco Bell’s Mexican Pizza prominently displayed on a picnic blanket; the name brand’s PR chief said in a LinkedIn post that Taco Bell didn’t sponsor the post.

And the chain keeps poignant. It’s rolling out artificial intelligence software to take drive-thru orders in hundreds of locations. And in early December, it unveiled a new drink-focused concept, called the Complete Mas Café. The first location is being tested in San Diego.

As Taco Bell continues to stand out, Yum plans to highlight the characterize in late January with an investor presentation outlining its strategy for next year.

stock has skyrocketed 192% this year. Wingstop’s quarterly same-store sales have climbed uncountable than 20% in every report it’s released this year. And traffic to restaurants keeps growing, despite online kickback over its portion sizes and the departure of longtime CEO Brian Niccol in September.

But it isn’t just those chains. Broadly, the fast-casual restaurant part has seen traffic rise 3% through October compared with the year-ago period, according to Circana text. And dollar sales have increased 8% for the category.

“You spend more money by going out rather than staying in, and dissipated casual seems to strike the right balance of the value equation,” said Circana’s Portalatin.

Chipotle and its fellow fast-casual shackles also benefit from a customer base that skews higher-income. Chipotle executives have previously told that they haven’t seen the same traffic reversals as the rest of the industry because the chain’s customers set up more money to spend on eating out.

Of course, there were a few losers even in the fast-casual category. Chains get a bang BurgerFi and Roti filed for Chapter 11 bankruptcy as their traffic fell and costs rose.

“Maybe they dilated too quickly and had other issues, and so they got into trouble,” John Bringardner, head of Debtwire.

Niccol collapsed the restaurant world in August when announced he’d be taking over as chief executive, following his predecessor’s ouster. Chipotle’s tired fell and Starbucks shares soared on the news in a combined market cap swing of $27 billion, showing LOSER: Dgag dining

WINNER: Chili’s

WINNER OR LOSER? Restaurants in 2025