By Evie Liu

Restaurant spending is not collapsing, it's becoming more fragmented.

Consumers are not cutting back restaurant spending across the board; they are trading down to brands that offer clear value, or trading up to experiences they believe justify the price.

Those stuck in the middle -- neither cheap enough nor differentiated enough -- are losing ground, according to Consumer Edge's Restaurant 2026 Mid-Year Outlook released Wednesday.

Recent company results make the argument easier to see.

Fast-food chains are leaning harder into value deals, trying to bring back diners that have pulled back after years of menu-price increases. McDonald's is using its McValue platform to give customers several lower-priced entry points, including an under-$3 menu, $4 breakfast meal deals, and lunch and dinner meal deals starting at $5.

Rivals such as Burger King and Taco Bell have been pushing their own discounts and bundled meals as well. The renewed focus on affordability is working: McDonald's U.S. comparable sales rose 3.9% in the latest reported quarter, Burger King posted 5.8% growth, while Taco Bell improved 8% from a year ago.

On the sit-down side, Chili's owner Brinker International has continued to benefit from a sharp brand reset built around value, advertising, and operational improvement. In its fiscal third quarter, Brinker's comparable restaurant sales rose 3.3%, including a 4% gain at Chili's, even as the chain lapped an unusually strong prior-year comparison.

Texas Roadhouse tells a similar story. With beef costs elevated, it is not the cheapest meal out there. But the brand offers a clear proposition: large portions, familiar food, and a dining-room experience that feels worth the check. In a squeezed consumer environment, that kind of perceived value can outperform pure discounting.

The steakhouse chain reported a 7.1% increase in comparable restaurant sales in the first quarter of 2026, with guest traffic counts growing 4.5%. That matters because restaurant sales growth driven only by higher prices is fragile; traffic growth suggests the offer is actually resonating with consumers.

Chipotle and Cava are described as winners in the Consumer Edge report, which cites "menu innovation and quality at a fair price."

Cava reported 9.7% same-restaurant sales growth in the latest quarter, including 6.8% traffic growth, showing that premium fast casual can still work when consumers see freshness, health, and experience as worth paying for. The company has avoided broad discounting, but said earlier this year that it would keep prices unchanged on most main menu items like bowls and pitas. Cava is also planning to launch its first seafood protein bowl.

Chipotle, in comparison, still has more to prove. The fast-casual chain remains a powerful brand, but comparable sales declined 1.7% in fiscal 2025. For a turnaround, Chipotle has leaned on menu refreshes, including the return of Chicken al Pastor, while testing smaller, lower-priced items such as single tacos and high-protein cups.

Consumer Edge calls pizza the "biggest loser" of 2026 so far as "health-conscious diners move away from large, shareable orders toward lighter options." Yum! Brands' recent decision to sell a struggling Pizza Hut underscores how difficult the category has become.

Papa John's North America comparable sales were down 6.4% in the latest quarter, while Pizza Hut's U.S. same-store sales fell 4%. Domino's Pizza is doing better, but its momentum has also cooled: U.S. same-store sales rose just 0.9% in the first quarter, below expectations.

Write to Evie Liu at evie.liu@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 17, 2026 15:15 ET (19:15 GMT)

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