Consumers are either trading down for discounts or trading up for experiences
Consumer behavior shifts significantly between seeking discounts and premium dining experiences.
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The article reports on changing consumer spending in the restaurant sector, noting a slowdown in sales for chains while coffee and snack categories experience growth. It highlights how brands with clear positioning are thriving, while those in the middle are losing share as diners shift toward value-oriented and premium options.
Why It Matters
This suggests that franchisees must adapt their offerings and marketing to meet evolving consumer expectations, which may compress competition among QSR brands. The shifting landscape may also impact unit economics as franchisees adjust to changing demand dynamics.
The Technomic Top 500 report highlights a challenging landscape for chain restaurants in 2025, as consumer spending has moderated, emphasizing a bifurcation in dining choices. Consumers are increasingly making one of two distinct decisions when eating out: trading down for discounts or trading up for premium experiences. This shift creates challenges for restaurants that lack a clear market position, leading to market share losses for those in the middle.
According to Michael Gunther, SVP of research & market intelligence for Consumer Edge, “Consumers are spending differently in 2026 as they reprioritize how to spend their food budget amid a shifting economic environment.” He emphasizes the need for brands to evaluate whether their pricing, menu, and strategies align with the current demands of consumers.
The report notes that while overall restaurant spending has seen a slight increase year to date, the fastest growth is occurring in the coffee and snack segments, led by brands such as Starbucks, Dunkin’, Dutch Bros, and 7 Brew, which have seen nearly 6% growth. Meanwhile, the pizza sector is experiencing significant declines, attributed to health-conscious diners shifting towards lighter meal options, particularly influenced by the rise in usage of GLP-1 drugs among consumers.
Discount strategies are proving effective, with fast-food giants like McDonald’s and Burger King attracting price-sensitive diners with aggressive value campaigns. Conversely, brands like Wendy’s, Jack in the Box, and Hardee’s are struggling due to perceived lower value and unclear differentiation. On the quality front, Chipotle and Cava are gaining traction through menu innovation and fair pricing, while Panera Bread and Sweetgreen report disappointing sales growth, revealing a gap for brands that fail to provide either affordability or compelling quality.
The report also indicates that rising fuel prices are impacting budget-conscious diners, further complicating the dining landscape. Overall, the implications for franchise operators are significant; those who can effectively communicate and deliver clear value propositions stand to benefit significantly in this shifting environment. Future performance may depend on how well brands adapt their strategies to meet the evolving preferences of consumers.
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