The Great Divide: How 2024 Redefined Winners and Losers in the U.S. Restaurant Industry

 

A Year Defined by Value, Relevance, and Reinvention

In 2024, U.S. restaurant industry sales grew just 3.1%, the slowest pace in over a decade (excluding 2020). Meanwhile, consumer spending at restaurants rose 6.6%, indicating that rather than declining demand, the industry is undergoing a seismic shift according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® Top-performing chains thrived on adaptability, digital fluency, and value-driven offerings—while legacy players losing ground demonstrated how rapidly stagnation can lead to decline.

 

Chains That Thrived: Smart Pricing Over Gimmicks

Leading chains successfully recalibrated strategy around competitive pricing, digital engagement, and menu clarity, driving steady growth—without relying on trendy spin-offs.

·       McDonald’s: Contrary to early experimentation with its CosMc’s beverage concept, McDonald’s has dropped the standalone coffee‐brand initiative and refocused on its core offering. Growth in late 2024 and early 2025 was largely driven by well‑priced value meals, including the $5 Meal Deal introduced in mid‑2024, which helped drive traffic when fully implemented. McDonald’s also leaned into its scale advantage, using loyalty data to tailor value messaging.

·       Starbucks: Continued to innovate with mobile ordering, premium beverage launches, and global expansion of branded experiences.

·       Chick‑fil‑A: Delivered strong growth through brand loyalty, service consistency, and measured global expansion.

·       Domino’s: Leveraged delivery partnerships, value promotions, and product innovation like stuffed crust launches.

·       Raising Cane’s: Built buzz via focused menu strategy, rapid expansion, and high‑profile collaborations.

 

Chains That Faltered: Status Quo Isn’t Sustainable

Chains failing to modernize—especially those relying on old value models or stale menus—faced steep declines in a market dominated by innovation and digital-first strategy.

·       Red Lobster: Filed for bankruptcy, suffering from weak seafood demand and brand fatigue.

·       TGI Fridays: No longer immune from financial collapse; capital structure and outdated appeal accelerated its decline.

·       KFC: Sales dropped by ~4%. The brand has struggled to compete with fresher fast‑casual and fast‑food options.

·       Del Taco: Saw ~4.2% sales drop; franchisee bankruptcies and rising costs exposed structural vulnerabilities.
These brands underscore how clinging to outdated formats—and ignoring evolving consumer expectations—can quickly erode market position.

 

Fast-Casual Momentum: Quality + Speed = Loyalty

The fast-casual segment grew ~9%, surpassing quick-service growth (~2.3%) and casual dining (~1.3%). Consumers are choosing better ingredients, customization, transparency, and tech-enhanced ordering experiences. These brands often lead with:

·       Chef-crafted, flexible menus

·       Traceable sourcing

·       Seamless digital ordering and loyalty integrations

·       Strong storytelling and community engagement

 

Marketing & Digital Strategy: Where Today’s Dollars Are Spent

·       Nearly all consumers read online reviews pre‑dining; platforms like Yelp underscore how even a 0.5‑star shift can alter business revenue by ~27%.

·       Digital ordering and delivery have grown roughly 300% faster than dine-in volume since 2014.

·       Influencer and targeted SEM marketing spending continues rising as review platforms and reputation shape visitation.

·       Consumers now expect weekly takeout or delivery, with many spending $50+ per order.

Together, these realities make digital reputation, targeted advertising, and delivery optimization foundational, not optional—whether you’re a national chain or local restaurateur.

 

Updating the McDonald’s Narrative: Coffee Wasn't the Growth Driver—Value Was

McDonald’s CosMc’s concept—a small offshoot focused on speculative beverage innovation—sparked buzz but was shut down in mid‑2025. Executives confirmed the concept will not continue standalone; instead, select CosMc’s-inspired drinks will roll into traditional McDonald’s locations.

Growth momentum in 2024 came not from CosMc’s, but from reestablishing McDonald’s core value proposition—particularly the $5 Meal Deal—alongside sharper use of scale and loyalty data to retarget price-sensitive guests. McDonald’s aims to restore traffic via affordability, while maintaining margins through operational scale.

 

Looking Ahead into 2025: Where Industry Leaders Are Betting

🔹 Continued fast-casual dominance

Offering quality, speed, customization, and local brand stories.

🔹 Smarter, tech-enabled value strategy

Chains with scale (like McDonald’s) will dig deeper into loyalty-driven pricing and differentiated promotions—value is best defended with precision pricing, not blanket markdowns.

🔹 Beverage innovation folded into core service

CosMc’s may be gone, but McDonald’s is integrating standout flavors into its menu at existing stores. This hidden “learning lab” approach positions beverage as growth—not distraction.

🔹 Personalization via AI and loyalty data

Chains are investing in AI-driven promotions, demand forecasting, and customized offers—honoring frequency and feedback.

🔹 Growth of retail product lines

Sauces, merchandise, and packaged items offer new revenue streams and deepen customer loyalty.

🔹 Sustainability and sourcing as brand anchors

Consumers increasingly reward transparency and planet-friendly practices—especially in millennial and Gen‑Z demographics.

 

Actionable Takeaways for Food Industry Leaders

1.       Price strategically, not opportunistically: Value messaging must resonate through local economics—not inflated list prices.

2.       Test innovations discreetly: McDonald’s CosMc’s showcased how to incubate menu ideas without disrupting the core brand.

3.       Invest in digital voice: Loyalty programs and data analytics are your early warning and early success systems.

4.       Lean into fast-casual expectations: Chef‑driven, flexible, narrative-led menus win where chain rigidity loses.

5.       Expand product horizons: Branded retail items and sauces extend shelf life beyond restaurants.

6.       Brand with purpose: Sustainability, local sourcing, and community grants increasingly attract premium pricing and loyalty.

 

Think about this, 2024 ushered in a marketplace separated by those prepared to evolve and those anchored in legacy models. Success in 2025 and beyond demands value grounded in insight, innovation incubated wisely, and operations sharpened through digital sophistication. The divide is real—and the path forward is clear.

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter