The situation: QSRs are in a tough spot. The restaurant industry had monthly traffic growth in just one of the 12 months through May, according to Black Box Intelligence data cited by CNBC. Our take: QSRs can’t afford to stand still. In a tough operating environment, brands that act decisively and innovate boldly are best positioned to outpace the macroeconomic headwinds. Even if every move doesn’t deliver an immediate payoff, momentum matters—and sitting on the sidelines is the riskiest strategy of all.
The strategy: Starbucks is testing better-for-you products in a bid to win over more health-conscious consumers, per Bloomberg. Our take: Starbucks is making some necessary changes—but there’s still plenty of work to do. Consumers want brands that meet them where they are, and that means prioritizing ingredient transparency and wellness without sacrificing flavor or convenience. For Starbucks, that could mean cutting back on sugar in key drinks, expanding nutritional add-ins, and offering more customizable options. If executed well, this strategy could help Starbucks reassert its leadership in the premium coffee space.
The insight: Food delivery has become an ingrained habit, with more consumers turning to the service multiple times per day. Our take: With more restaurant spending being funneled through platforms like DoorDash and Uber Eats, operators are having to rethink their acquisition strategy. Companies previously reluctant to sign on to their marketplaces—like Olive Garden and Domino’s—are changing their tune as it becomes clear that consumers’ affinity for delivery is not a pandemic blip. At the same time, DoorDash and its competitors are aiming higher. For them, food delivery is merely the first stepping stone toward becoming a one-stop shop for all of consumers’ needs, from restaurant meals to groceries to pet and home improvement supplies. That’s an ambitious goal, and one that is not yet reflected in shoppers’ behavior—but that could change as people become more accustomed to spending time on delivery apps.
The news:The Krispy Kreme–McDonald’s marriage is ending. The announcement comes less than two months after the companies said they were pausing a nationwide rollout—despite doughnuts being available in 2,400 McDonald’s locations—to reassess the profitability of the expansion. Our take: The breakup with McDonald’s comes at a tough time for Krispy Kreme—and for many other quick-service chains. The company has pulled its 2025 forecast, paused its dividend, and is now refocusing on what matters most: boosting cash flow, improving efficiency, and growing in a way that actually makes money in the US. The McDonald’s partnership gave Krispy Kreme more visibility, but not enough profit. With costs rising and margins getting tighter, the company is shifting its focus from rapid expansion to ensuring its business is built to last.
The trend: Casual dining chains that lean into value are luring cost-conscious consumers, even as broader economic uncertainty tempers discretionary spending. Our take: Consumers haven’t stopped dining out, but they’ve become more selective. They’re increasingly looking for value experiences that offer more for their money. That shift is pressuring some parts of the industry. Quick-service chains like McDonald’s and fine dining brands like Darden’s Ruth’s Chris and The Capital Grille are feeling the squeeze. But it’s providing an opportunity for casual dining chains that offer affordable indulgences. Their combination of sit-down service and budget-friendly pricing is hitting the mark.
Despite political pressure, McDonald’s is standing by its commitment to inclusion. While it recently replaced “DEI” language with “inclusion,” its initiatives remain intact, per Bloomberg. That contrasts with brands like Target, Nike, and JPMorgan Chase, which have scaled back DEI and climate efforts amid conservative backlash. McDonald’s cosmetic rebranding reflects a strategic calculation: investing in programs it views as beneficial for business and essential to long-term brand equity, especially with key demographics. If it avoids major backlash, McDonald’s could offer a model for other brands weighing how to uphold values while managing political and reputational risk.
Restaurant visits are declining as consumers worry about their finances: Uncertainty is pushing customers to be more discerning about where they spend their food dollars.
Clucking strong in a soft market: Chicken-focused restaurants are drawing more visits than other fast-casual chains with a winning formula of value, variety, and innovation.
Low-income consumers feel squeezed: With prices rising and the GOP tax bill set to reduce their after-tax income, relief may not come soon.
Starbucks’ dominance is under threat as Dutch Bros’ growth surges: The coffee giant is struggling to stem a sales slump as the latter’s colorful drinks and service win it more customers.
Consumers pulled back on dining out in Q1: Restaurant Brands faced headwinds but saw an April rebound, while Krispy Kreme is changing course to regain momentum.
Food delivery platforms are in expansion mode: DoorDash, Uber, Instacart, and Wonder are turning to acquisitions and new markets to maintain their momentum.
Middle- and low-income consumers pulled back on fast food in Q1: That posed a significant challenge for McDonald’s, which reported its US same-store sales fell 3.6%.
Tariffs cast a shadow over consumer spending in Q1: Growth slowed from 4.0% in Q4 to just 1.8% in Q1 as households sharply cut back on goods.
Weakening demand hits QSR same-store sales: Starbucks, Chipotle, and Pizza Hut are among the chains reporting a slowdown as consumers pull back.
Domino’s customers pulled back on delivery to save money: Consumers’ focus on cost is unlikely to ease anytime soon, especially with new tariffs expected to push everyday prices even higher.
DoorDash makes $3.6 billion bid for Deliveroo despite global economic uncertainty: The delivery company hopes to broaden its international reach at a time when consumers are cutting restaurant spend.
Chipotle sees pullback in spending tied to consumer unease: Despite those challenges, McDonald’s and Sonic have both found recent success with limited-time promotions.
Domino’s inks deal with DoorDash to expand delivery reach: The partnership will put the pizza chain on track to reach its goal of $1 billion in sales from aggregator platforms by 2026.
Dutch Bros’ secret sauce helps it defy gravity: The coffee chain is thriving at a time when macroeconomic headwinds are creating clear challenges for companies like Starbucks and McDonald’s.