Rising inflation has pushed many Americans to eat at home more often while still choosing restaurants for quick meals. Casual dining chains such as Texas Roadhouse and Olive Garden reported sales increases, with Texas Roadhouse up 5.8% and Olive Garden up 6.9% in their reported quarters. Other casual brands like Chili's and The Cheesecake Factory also saw notable sales gains. Fast food chains have experienced weaker traffic and sales declines as customers perceive them as less attractive value. Casual chains attract customers with promotions, larger portions, and weekday BOGO or happy hour deals that offer more perceived value at similar prices.
With rising inflation showing no signs of slowing down, Americans are tightening their belts by opting to dine in. Though higher costs make eating at home the more cost-friendly option, people will always swing by an eatery when in need of a quick bite. Fast food used to be the go-to spot for cheap food, but casual spots like Texas Roadhouse and Olive Garden seem to be winning more customers.
In general, inflation has increased the price of food, but those aren't the only numbers going up. Texas Roadhouse saw a 5.8% increase in sales during its second quarter, while Olive Garden's fourth quarter saw a 6.9% jump in restaurant sales. The growth isn't limited to just these two eateries, though. Other fast casual spots like Chili's and The Cheesecake Factory experienced a 24% increase in the fourth quarter and 1% yearly increase, respectively.
Meanwhile, fast food spots are experiencing less foot traffic due to customers viewing them as a luxury. This may seem ironic, but the sales disparity comes from how these companies approach business. Deals like Chili's happy hour and weekday BOGO promotions at Applebee's and Ruby Tuesday's are more appealing to customers. Plus, with casual restaurant portions heftier than fast food, at around the same price, consumers value more bang for their buck.
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