Olive Garden parent CEO says fast food inflation driving customers to sit-down franchises
How have Darden's competitors capitalized on fast food inflation?
Darden's competitors, such as Brinker International (Chili's) and Applebee's parent Dine Brands, have capitalized on fast food inflation by marketing towards fast food customers with cheap deals6. They have introduced discounted combo meals and value meal offerings to attract diners who are looking for better value due to the rising costs of fast food.
What is causing consumers to perceive fast food as a luxury?
Consumers are perceiving fast food as a luxury due to the rising prices of fast food meals, which have outpaced inflation in recent years. A recent survey conducted by LendingTree found that 78% of consumers now consider fast food to be a "luxury" purchase based on high prices, and half of those polled said they view fast food as a luxury because they are struggling financially13.
What is the impact of fast food inflation on sit-down franchises?
Fast food inflation is driving some customers to opt for sit-down franchises, as they perceive fast food as a "luxury" purchase due to high prices. This shift in consumer behavior has led to a slight increase in sales for casual and fine-dining chains3. Sit-down restaurants are also offering meal deals and innovations to attract fast-food customers, capitalizing on the dissatisfaction with fast food prices.