WHAT YOU NEED TO KNOW
- Restaurant chains are emphasizing better food quality as selective consumers dine out less frequently.
- Burger King reported 8.4% U.S. sales growth at established locations after upgrading the Whopper, nuggets and sauces.
- Wendy’s unveiled food improvements while reporting its seventh consecutive quarter of declining sales at established locations.
- Chili’s, Applebee’s and McDonald’s are upgrading steaks, chicken, coffee and other central menu offerings.
DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.
Restaurant chains are putting the product back at the center of their efforts to attract increasingly selective diners. Over the past two years, consumers have eaten out less often and become more particular about where they spend their money, according to Black Box Intelligence data.
Value has dominated restaurant executives’ conversations with analysts and investors during that period. Yet the industry’s definition of value is expanding beyond price, with food quality and taste becoming central to the pitch.
Discounts and temporary promotions can boost customer traffic, but restaurants still need appealing products to support lasting growth and franchisee profitability. Chief executives at companies including Wendy’s and Chipotle Mexican Grill recently highlighted improvements to current or upcoming menu items during quarterly earnings calls.
Chipotle CEO Scott Boatwright discussed the chain’s brisket, which returned to menus Thursday for a limited time. “We think the product’s improved and even better,” Boatwright told analysts during the company’s call in late October.
At Wendy’s, better food is one pillar of a five part turnaround strategy unveiled Thursday. CEO Bob Wright said the chain has started testing thicker and crispier bacon, whole leaf lettuce on sandwiches, improved salads and a richer, creamier Frosty.
The announcement arrived as Wendy’s reported its seventh consecutive quarter of declining sales at established locations. The company also rejected a $1.4 billion takeover proposal led by Nelson Peltz’s Trian Partners, saying the offer failed to account for the potential value its turnaround could unlock.
Domino’s Pizza provides a prominent example of how a menu overhaul can help revive sales. In 2009, the company changed its recipe by replacing the sauce, adding garlic to the crust and moving to shredded mozzarella with a hint of provolone.
Domino’s paired the changes with blunt advertisements comparing its previous crust to cardboard and its former sauce to ketchup. Sales at established U.S. locations increased 9.9% the following year, and some members of that turnaround team are now applying a similar approach at Burger King’s U.S. restaurants.
Burger King’s multiyear comeback plan includes improvements to its core menu. The chain upgraded the Whopper with a better bun and new mayonnaise, then overhauled its nuggets in September with 100% white meat, crispier breading and a more flavorful marinade while also reformulating its sauces.
Restaurant Brands International CEO Josh Kobza said the company began with its largest categories while considering which fixes would be more straightforward and require less operational involvement. Restaurant Brands International is Burger King’s parent company.
After those changes, Whopper sales rose by a percentage in the double digits during the third quarter, Kobza said on the company’s late October earnings call. Nugget sales increased more than 35%, while Burger King reported an 8.4% increase in sales at established U.S. locations.
Burger King is also using advertising to confront past customer complaints about Whoppers and nuggets. The advertisements feature Burger King U.S. president Tom Curtis, a former Domino’s executive, echoing the frank promotional strategy used during Domino’s recipe overhaul.
Menu improvement is not limited to struggling chains. Chili’s has recorded a 52% increase in sales at established locations over the past three years, yet it continues upgrading existing choices after working on its baby back ribs, burgers and nachos.
Brinker International CEO Kevin Hochman said Chili’s will next focus on salads and steaks. “We’re going to be doing more dry aging of our beef to make it more tender, versus doing it in a plant,” he said. “It’s a little bit more expensive, but we think the taste is going to be a whole lot better.”
Applebee’s introduced a juicier chicken tender during its latest quarter, according to Dine Brands CEO John Peyton. The chain plans to overhaul more of its protein choices in 2027 as customers place greater emphasis on protein and somewhat less on carbohydrates.
McDonald’s is testing hand breaded wings, strips and a sandwich at several restaurants in the Chicago area, with plans to expand the trial to more U.S. and Irish locations in early 2027. The company is also pursuing fresher coffee beans and upgraded equipment.
Chicken and coffee are fast growing categories that offer McDonald’s more opportunities to increase sales than its signature beef burgers. Its U.S. sales at established locations declined 0.2% in the third quarter after its value strategy failed to gain the traction the company had sought.
McDonald’s is also emphasizing training to improve the quality and consistency of its central menu items. In October, it launched Make It Golden, a multiyear program for corporate employees, restaurant workers and franchisees, reflecting the reality that improved recipes deliver little unless restaurants execute them consistently.
DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.
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