Casual dining restaurant chains in the US are facing some moments of truth in 2025.
After five years of raising their prices at a faster pace than inflation, they may need to get more creative at a time when the combination of rising costs and sharply declining consumer confidence threaten their margins.
Data reported last week showed that leading US chain restaurants raised their prices by 42% on average between 2020 and 2025, compared to 22% for overall US inflation and 30% for “food away from home” sub-category.
Some chains have responded to the recent pressures by playing the Choice Game well and modifying their menu. One principle of the Choice Game is that the relative relationship of menu prices is more important than the individual prices.
According to the report, Chili’s has raised prices by 39% over the last five years, but the chain has succeeded in directing consumer attention instead to its highly successful” 3 for Me” promotion. Denny’s, which has raised prices by 42% over the same period, reintroduced its “$2 $4 $6 $8 Value Menu” last year to keep lower prices at the consumer’s eye level.
Waffle House has reportedly raised prices by almost 100% over the last five years. It responded to the recent spike in egg prices by instituting a 50-cent surcharge per egg rather than changing menu prices outright.
What promotions or creative menu changes have you seen recently?
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Original article can be found here.