Fast Food Customers Are Turning to Casual Restaurant Chains Amid Ongoing Inflation and High Prices

By: Julia Mehalko | Published: Jun 21, 2024

New data has revealed that fast food customers are turning away from fast food establishments and heading to casual restaurant chains amid ongoing inflation and high menu prices at eateries like McDonald’s and Burger King.

This latest revelation has been backed by Darden Restaurants CEO Rick Cardenas. Darden Restaurants owns many restaurants, such as Olive Garden, Cheddar’s Scratch Kitchen, and Yard House.

Fast Food Prices Soar

Over the past few years, many customers have openly complained that fast food is no longer affordable. Instead, it’s become increasingly expensive.

A close-up of a Quarter Pounder McDonald’s burger.

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Fast food menu prices have skyrocketed since the pandemic, thanks to high inflation, as well as high food and labor costs.


Fast Food Is Not Affordable for Many

Menu prices at fast food restaurants like McDonald’s have risen so much in price recently that many Americans feel they can no longer afford to eat at the previously cheap establishments.

A Burger King crown on a wooden surface.

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In fact, a recent LendingTree survey found that a whopping 78% of consumers consider fast food to be a “luxury” purchase now.

Casual Restaurants Advertise to Americans

As a result of these higher prices at fast food places, many Americans have touted that they’re price fatigued. They no longer want to spend all this money at McDonald’s or Wendy’s.

A view of a lit-up Applebee’s seen in San Francisco in the evening.

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This has led many casual restaurants, such as Chili’s and Applebee’s, to swoop in and advertise to these price-weary Americans.

Chili’s Calls Out McDonald’s

This new rivalry began recently — and casual restaurants already seem to be on top. After news broke about how expensive Big Macs and other fast food burgers have become, Chili’s took the opportunity to run an ad campaign calling out these high prices.

An exterior view of a Chili’s restaurant seen in California in the daytime.

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Chili’s has claimed that consumers can get burgers and meals at a cheaper price than they can at these fast food spots.

Fast Food vs Casual Restaurants

Data has shown that limited-service eateries, such as fast-food restaurants, have seen a greater increase in menu prices than their full-service counterparts.

An exterior view of an Applebee’s seen at night.

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According to the Department of Labor, limited-service restaurants have raised menu prices by 4.5% over the last 12 months. Meanwhile, full-service menu prices have only risen 3.5% over that same period.


Consumers Are Turning Away From Fast Food

This data has led to many consumers actually refusing to eat at fast food spots — and instead heading to casual restaurants, where they might be able to get a full meal for an affordable price.

An exterior shot of an Applebee’s seen with an empty parking lot in the daytime.

Source: Michael Rivera/Wikimedia Commons

John Peyton, the CEO of Dine Brands, recently revealed that Applebee’s has successfully been pushing deals that have won over these fast food customers.


Industry Data Confirms Shift

Darden’s CEO Cardenas also backed this claim up — even if Darden’s own restaurants aren’t yet seeing this shift head to their establishments.

Cars parked in front of a Chili’s restaurant in the daytime.

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While on a quarterly earnings call, Cardenas explained that industry data is revealing “a little bit of a shift from [quick-service restaurants] to some of those competitors,” such as Chili’s and Applebee’s.


Other Fast Food Rivals

Casual restaurants like Chili’s and Applebee’s aren’t the only new rivals looking to steal away fast-food diners. Grocery stores have also worked to shine a light on their own lower prices when compared to fast-food eateries.

A close-up of fruits and vegetables seen on grocery store shelves.

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In normal times of economic concerns, fast food restaurants normally do quite well, as many consumers head to their locations because they have more affordable prices. However, this hasn’t appeared to be happening recently, thanks to these high menu prices.


McDonald’s Recent Moves

Many fast food chains have seemed to notice they’re receiving a slowing down in foot traffic at their locations. This has led some to push new deals and promotions to bring diners back in.

A view of the top of a McDonald’s building seen with its logo.

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McDonald’s — a company that has been heavily criticized by consumers because of its high prices — has made many recent moves to appease their customers.


A New $5 Meal

Perhaps most notably, McDonald’s has officially revealed their new $5 meal this week. This new value meal will give customers a McDouble or McChicken, alongside a four-piece McNuggets, small fries, and a small drink.

A close-up of McDonald’s fries in a red carton.

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McDonald’s is hoping that this more affordable meal will bring many diners back into their locations around the country. The fast food giant is also pushing free French fries promotions on Friday for the rest of this year.


An Uncertain Future

However, as this new $5 meal is only available for a limited time, there’s no telling if this move will successfully bring many consumers back to McDonald’s.

A person holding a cheeseburger.

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As long as restaurants like Chili’s can continue to claim that they’re cheaper than McDonald’s, American consumers may continue to pivot from fast food to casual restaurant dining.