MOD Pizza has been sold. The wave of restaurant discounts appears to be working. And Chili's gets sued by the Beastie Boys.

This is the last episode to appear on the First Bite channel! If you would like more daily updates on the restaurant industry, subscribe to Restaurant Daily at Apple Podcasts here and Spotify here.

It's a strange moment for restaurant mergers and acquisitions. Chipotle's CFO is retiring. And Burger King is heating up its menu.

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Hooters closes some struggling restaurants. A Subway franchisee files for bankruptcy. And see the brands that are doing the best at satisfying their customers.

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Last month, the U.S. Supreme Court agreed to hear Starbucks’ appeal of one of many labor-related lawsuits filed against the Seattle-based coffee chain. This appeal is Starbucks’ response to an Aug. 2022 U.S. district court decision, which ordered the coffee chain to reinstate seven previously fired workers in Memphis, Tenn., who were terminated earlier that year during an attempt to unionize the store.

Chipotle’s Q4 2023 results far exceeded expectations, as well as the industry at large, with Tuesday’s report showing a same-store sales increase of 8.4%. Revenue increased 15.4% to $2.5 billion, while restaurant level operating margin increased to 25.4%, or about 140 basis points.

The company also opened a record 121 new restaurants during the quarter, 110 of those in the Chipotlane model. The highlight of the company’s report, however, was its transaction gain of 7.4%. This is compared to a 1.6% decline across the limited-service segment in the quarter, according to Placer.ai data, as well as negative traffic recently reported by both Starbucks and McDonald’s.

If this all sounds familiar, it’s because Chipotle reported traffic increases of over 4% in Q3, compared to negative 4.2% industrywide. Notably, Chipotle CEO Brian Niccol said this time around the chain has shown strength across all income cohorts – a different tune than McDonald’s, which reported earlier this week it has experienced negative transactions from lower-income consumers.

The National Restaurant Association released its annual 2024 State of the Industry report, and unsurprisingly, technology is one of the top concerns both for consumers and operators. In fact, according to the report, more than three-quarters of operators believe that technology gives them a competitive edge. But they still believe they have a long way to go, as only 13% of operators said that their restaurant technology is leading-edge. To remedy this gap in technology investment, 60% of operators said they plan to invest in consumer-facing technology in 2024, while just over half plan to invest in kitchen-facing technologies.

McDonald’s reported mixed results from its Q4 and full-year earnings report Monday morning. The company’s quarterly same-store sales, at 3.4%, fell short of expectations and were weighed down by the war in the Middle East.

Domestically, same-store sales were up 4.3%, mostly in line with expectations but well below the company’s performance in its most recent quarters. U.S. same-store sales in Q4 2022 were up over 10%, for instance, while the company is up over 30% versus where it was in 2019. CEO Chris Kempczinski said he expects the rest of this year to play out similarly to Q4, which is “normalized growth.”

In the U.S., McDonald’s is navigating transaction reductions from its lower-income consumers making $45,000 and below. Kempczinski noted that these consumers are likely opting to eat at home as grocery/supermarket inflation has cooled faster than food-away-from-home. The company is focused on re-engaging these customers this year.

A U.S. District Court judge has granted food supplier US Foods default judgment in its July lawsuit against Boston Market for unpaid bills, starting in 2022. Although Judge Manish Shah explained that default judgment is a “harsh sanction,” in this case both the court and plaintiffs had no choice because Boston Market had “intentionally dodged their obligations to the court” in a display of “bad faith to avoid this case.”

Chipotle founder Steve Ells’ semi-automated, plant-based restaurant, Kernel — which raised $36 million in Series A funding last summer — has received some superstar investors and an official opening date. New York Giants quarterback Daniel Jones and Chicago Bears quarterback Justin Fields (the latter is a known strict vegetarian) have received equity stakes in Kernel in exchange for their monetary investments in the budding company, according to The New York Post.

Although the first quarter is usually one of the highest-performing times of the year for Starbucks — including both pumpkin spice and red cup season — Starbucks saw a traffic downturn for the quarter ended Dec. 31, 2023, with North America comparable sales up only 5%, driven mostly by menu price increases.

During the Starbucks earnings call on Tuesday, CEO Laxman Narasimhan pointed to the Israel-Palestine conflict as a source of friction in both the Middle Eastern markets and in the U.S., where there have been calls for boycotts of Starbucks from supporters on both sides of the conflict. Narasimhan also explained that slower spending in China contributed to headwinds for the quarter — an issue that was highlighted by Luckin Coffee overtaking Starbucks as the number one coffee chain in China this November.

As January ends, fourth-quarter earnings for the restaurant industry begin. This quarter laps the last quarter of 2022 where winter storm Elliot ravaged the country with blistering cold and snow. That’s compared to the fourth quarter of 2023 where restaurants were able to celebrate that Christmas landed on a Monday and overall favorable weather through the end of the year.

That means the editors at NRN are anticipating same-store sales increases across many brands though some segments are expected to lag. Mainly casual dining except for Darden, most likely, because of the company’s immense popularity. Five of Darden’s brands landed on our report, America’s Favorite Chains and we expect their earnings to show as much.

Expect the next week to hold some big numbers as Brinker, McDonald’s, Chipotle, and Yum Brands report.

However, investors have said that they expect the consumer to soften in 2024 so this may be the last bit of good news for a while.

New York City mayor Eric Adams announced last week in his annual State of the City address that the city would be creating a watchdog agency to regulate the booming delivery industry. The Department of Sustainable Delivery would be the first of its kind of the nation and would be designated to protect both delivery drivers and consumers.

What makes people really love a restaurant brand? Not just “what brand do they most frequent?” because inevitably the McDonald’s and Starbucks of the world would be at the top of the list purely as the winners of a numbers game. Rather, what makes people put that restaurant at the top of their mental list of favorite places to eat?

Uncle Julio's apparently has a potential buyer in the wings. American Express bought reservations platform Tock. And, if you've noticed a lot of steak on fast-casual menus, you may be onto something.

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According to a new report from Yelp, new restaurant openings surpassed pre-pandemic openings in 2023. This indicates the industry may have made a full recovery nearly four years after mandated closures were put into place to control a then-unknown and quickly spreading virus, which impacted an estimated 110,000 restaurants.

Chipotle is preparing for its busiest time of year – March to May – by targeting 19,000 new hires throughout the next couple of months. To incentivize potential employees, the company has added several new benefits, including the addition of a student loan retirement match program.

Potbelly announced Monday the redesign of its loyalty program, Potbelly Perks, which now emphasizes faster and more custom rewards, and an easier-to-use customer interface.

Pinstripes embarked upon a pre-IPO roadshow in early 2020. We all know what happened then, however. Then Omicron happened. Then the IPO market all but froze last year. Fast forward to 2023, and Banyan entered the conversation and invested $21 million upfront as a “precursor.”

The state of Massachusetts and Grubhub have reached a settlement in the state attorney general’s 2021 lawsuit against the third-party delivery company for repeatedly violating the Massachusetts pandemic-era delivery fee caps.

Not even a month into 2024 and it’s safe to say Dutch Bros has had a busy year thus far. As the calendar turned, Christine Barone officially took over the CEO role after serving as president for a little over a year. The company shared development guidance, aiming for 150 to 165 new units this year, including its initial entry into Florida in Q1. The long-term growth target is about 4,000 locations.

As voice AI and robotics technology becomes more intelligent and widely-used, one of the more common user-end complaints is that the technology is not quite sophisticated enough to handle interactions as perfectly as a human might. For example, Presto Voice AI company recently published an article detailing its “Human in the Loop” approach to voice AI: people that are able to take over if and when AI is unable to understand a human—which Presto says it does not have to do 85% of the time.

Not only are robots and AI becoming more adept at understanding human guests, they are also becoming more conversational. Vox AI is (yet another) voice AI company that is looking to revolutionize the drive-thru and the company differentiates itself by claiming to be the most intelligent and conversational voice AI on the market now. RichTech Robotics — known for its robotic barista/bartender, ADAM — announced similar updates to the drink-making robot, which makes him more conversational than previous iterations.

In other news this month, POS integration platform Chowly acquired digital marketing platform Targetable, and PathSpot introduced a new platform that targets food safety.

The ICR Conference, the food and retail industry's investor event, occurred earlier this month with many public companies presenting key findings and future plans.

Executive editor Alicia Kelso attended the conference and was able to speak with executives. Many of those conversations will appear on our website in the upcoming days and weeks.

Today, she spoke with First Bite about what she learned from the 2024 conference and how Papa Johns stood out to her among the crowded rooms.

Many Americans participate in Dry January. Estimates of how many U.S. drinkers forego alcohol for the month range from 15% to 35%.

And although many of you would probably prefer that Americans take a break from drinking during busier months, Dry January doesn't have to mean weak drink sales.

There are now many socially acceptable options for non-drinkers that also are profitable for restaurateurs. Non-alcoholic beer is part of the regular inventory of many restaurants and bars and, according to an October report in The Wall Street Journal citing Euromonitor data, accounted for 0.9% of beer sales by volume as of September 2023. In Western Europe it accounts for 5.8% of total beer consumption.

There’s also an abundance of alcohol-free wine and zero-proof substitutes for hard liquor. And bartenders are getting better at making spirit-free cocktails.

For more on how to make the most of dry January in your restaurant, here's senior food & beverage editor Bret Thorn.

On Jan. 9, the U.S. Department of Labor announced a final rule on classifying workers as employees or independent contractors. Although the new six-factor guide is meant to help clarify and, in many cases, tighten standards around misclassification of workers, third-party delivery companies are confident that it is business as usual for delivery workers.

As the legal landscape around third-party delivery workers begins to shift substantially through local legislation — including a new New York City minimum wage law for contractors that work for delivery apps — on a federal level, standards might not change much for these same delivery app workers.

The final rule, which goes into effect on March 11, 2024, reinterprets the 1938 Fair Labor Standards Act and negates the effects of the Independent Contractor Status Under the Fair Labor Standards Act, which was passed during the Trump administration.

A number of small restaurant chains have filed for bankruptcy recently. Pizza Hut is trying to terminate one of its largest franchisees. And another bankrupt chain gets hit with an employee lawsuit.

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For Domino’s Pizza, everything is on the table in 2024 and 2025: From relaunching loyalty programs to boost traffic, and trying out promotions that garner more buzz and traffic than sales, to fully embracing the new Uber partnership and looking to expand to more delivery platforms in the future. On Monday at the ICR conference in Orlando, Domino’s CEO Russell Weiner and CFO Sandeep Reddy broke down the company’s new “Hungry for More” strategy, which was just announced last month and included the launch of a proprietary operating system.

The appropriately named 2024 strategy has Domino’s saying “yes, more” to everything, including loyalty participation, pizza delivery options, tech innovation, and marketing innovations like the emergency pizza promotion, which is an upgraded “Buy one get one free promotion” that lets customers buy a pizza and get a promotion for another free pizza to use at a later date.

Desserts can be a tricky sell. Guests love them and they’re highly profitable, but it’s not always easy to convince customers to invest in the extra time, money, or calories.

One option is to make them drinkable.

Beverage consumption in general is surging as consumers turn to menu items that are fast, portable, customizable, and satisfying, especially in the growing afternoon daypart. Restaurant companies large and small have noticed, and are responding with an array of drinkable desserts.

Whether they’re milkshakes, dessert cocktails, coffee slushes or other options, these sweet, fun, and often textured drinks are striking a chord with guests.

While restaurants have been selling their products in supermarkets and convenience stores for decades — from frozen White Castle sliders to TGI Fridays mozzarella sticks — recently, foodservice CPG has entered a new social media-conscious era.

Recently, Starbucks collaborated with Stanley (the makers of the uber-popular insulated tumbler) to sell a $49.95 “Winter Pink” 40-ounce Starbucks cobranded cup, available exclusively at Target on Jan. 3 to celebrate the new Starbucks winter menu. Collaborating with multiple trendy brands to market a limited-edition item to the core Gen. Z demographic was a recipe for virality: Long lines of customers waited outside of Target before dawn to grab their tumblers (limited to a few dozen per Target location), and the coveted cups are already reselling for $350 on eBay.

Two major California Pizza Hut franchisees — PacPizza and Southern California Pizza Company — are laying off more than 1,200 delivery workers ahead of the new statewide minimum wage hike for fast food workers, from $16 an hour to $20 an hour, starting April 1.

The two companies — which together own hundreds of Pizza Hut restaurants in Orange, Los Angeles, Riverside, San Bernardino and Ventura counties — are eliminating the delivery driver position as the layoffs become official in February, according to federal WARN Act notices filed last month with the Employment Development Department.

Undeniably one of the biggest trends of 2023 was restaurant brands leveraging influencers on social media to sell their products. These influencers resonate with the coveted Gen Z demographic and help position brands top of mind, even if just for a fleeting moment. And apparently they’re very effective at convincing others to try a menu item. Consider Chipotle’s fajita quesadilla campaign with TikTok influencers Alexis Frost and Keith Lee, for example. The 2023 promotion helped generate two of the company’s top digital sales days of all time.

Influencer marketing is certainly nothing new, but it is reaching a fever pitch and, in fact, the industry has increased by nearly $20 billion in the past seven years. Restaurants in particular are well positioned to capitalize on this trend. According to CreatorIQ, more than 437,000 creators posted about food and beverage brands more than 1.2 million times, driving nearly 75.5 billion impressions, 3 billion engagements and a whopping $4.8 billion in earned media value (EMV). And those numbers are just from the first half of 2023.

Consumers said they were going to dine out during the holidays, and recently released data indicates they did just that.

A National Restaurant Association survey from early December showed that 63% of adults planned to eat out during the subsequent weeks, while 48% planned to order takeout or delivery. As such, after experiencing a dip in traffic through much of September and part of October, business appears to have picked up in early November and continued through the end of the year. Master Card Spending Pulse data shows that restaurant sales were up 7.8% from Nov. 1 through Dec. 24 versus the same period last year – the highest gain among all sectors, and by far. By comparison, retail sales increased 3.1% year-over-year.

Further, Technomic Ignite’s Tindex indicates industry sales were up nearly 10% in November 2023 versus November 2019. Of course, a good chunk of this increase comes from elevated pricing, but it indicates consumers are still very much willing to pay those higher menu costs. Notably, wage growth has outpaced inflation growth.  

One week after the release of the third-party assessment of Starbucks’ collective bargaining commitments in December 2023, the Strategic Organizing Center — a coalition of labor unions provoking a proxy battle with the Starbucks executive board — responded. According to the SOC, the results of the independent audit very clearly show a “track record of human capital mismanagement” and that leadership change is needed to facilitate more constructive outcomes for labor-related discussions and agreements.

With its nomination of three directors to the Starbucks executive board, the Strategic Organizing Center hopes to address the company’s treatment of its employees, including Starbucks’ clashes with its growing union, arguing that the company’s alleged union-busting tactics have led it legally vulnerable and have tarnished the goodwill of the Starbucks brand.

4 predictions from senior food & beverage editor Bret Thorn:

Indian cuisine, finally

Trend watchers have been waiting for Indian cuisine to really take off in American dining for decades, and it seems to finally be happening. Medium- to high-end independent Indian restaurants are opening across the country, some led by big-name restaurateurs including Maneet Chauhan in Nashville, Rohini Dey in Chicago, and Srijith Gopinathan in San Francisco, and others by operators still developing names for themselves. Then there’s the growing roster of fast-casual Indian restaurants including Rasa, Curry Up Now, The Kati Roll Company, Tarka Indian Kitchen, Inday, Choolaah Indian BBQ, Tulsi Indian Eatery, and many more. Also of note is the addition this past August of a Zingers Tikka Wrap on the permanent menu of Miller’s Ale House, a casual-dining chain not known for its adventuresome cuisine.

The Zingers is what Miller’s calls its signature chicken tender, but in this case, it’s wrapped up to resemble a kathi roll.

Coffee as the base for spirit-free cocktails

Consumption of coffee is on the rise, as are energy drinks and non-alcoholic cocktails. Young consumers, dating back to when Generation X was young, have long enjoyed energy drinks — often Red Bull — spiked with alcohol. And what has arguably been the trendiest cocktail over the past few years? The Espresso Martini.

Put all of that together, and the stage is set for a proliferation of coffee standing in as the base for spirit-free Old Fashioneds and espressos and tonic. Versions of those drinks are already available at some coffeehouses, notably Everyman Espresso in New York City and Paper Plane Coffee Co. in Montclair, N.J.

That’s already a lot of factors pointing to a beverage trend in the making, but there’s another one, too: Cold brew coffee, the increasingly popular version of America’s favorite pick-me-up, is getting better. Some coffee aficionados have long said cold brew doesn’t extract the unique flavors of high-end beans, but new technology from companies such as BKON, based in Morriston, N.J., have developed technology to extract those flavors. That allows coffeehouses to develop cold brew concentrates unique to their brand, and also makes premium coffee available to bars that might not want to make their own.

White lamb

There’s a fairly new breed of sheep arriving in the U.S. from Australia. The Australian White Sheep has hair instead of wool, giving it a somewhat milder flavor because it doesn’t taste of lanolin from the wool, a plus for people who find lamb to be gamy. But it still tastes very much like lamb. It also has a lot of intramuscular fat, but unlike wagyu beef, which also has a lot of marbling, the meat is nonetheless firm. However, the fat has a lower melting point than traditional lamb, resulting in less of a greasy feel, and arguably a better nutrition profile since it contains less saturated fat. Also unlike wagyu, Australian White Sheep is all grass-fed.

It's likely to sell at around a 10-15% premium to conventional lamb.

Ammonium chloride

Residents of the Nordic countries — Denmark, Finland, Iceland, Norway, and Sweden — have long enjoyed salmiak, a salty licorice that gets part of its distinctive flavor from ammonium chloride.

Also called salmiak salt, Ammonium Chloride is a slightly toxic substance that researchers from the University of Southern California and the University of Colorado recently discovered might trigger a unique taste all its own, apart from the five senses of sweet, sour, salty, bitter, and umami.

What does it taste like? Well, Andrew Richdale, writing in Saveur magazine in 2017 and recently cited by bigthink.com, said it “felt simultaneously fascinating and … abusive? Or at least odd like a knocked funny bone.”

Others say it tastes bitter, salty, and

Accomplished chef James Kent has died. Fast-casual pizza chain Blaze overhauled its brand. And Asian concepts were among the winners in casual dining last year.

First Bite is becoming Restaurant Daily! Don't forget to subscribe at Apple Podcasts here and Spotify here.

McDonald's is ending its AI drive-thru test. Former Red Lobster employees are suing the chain. And a TGI Fridays operator files for bankruptcy.

First Bite is becoming Restaurant Daily! Don't forget to subscribe at Apple Podcasts here and Spotify here.

The Supreme Court delivers a win for Starbucks. The economy comes for Dave & Buster's. And yet another chain launches a meal bundle.

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Alamo Drafthouse has been sold. There's good news and bad news on the menu price inflation front. And Starbucks is joining the value wars.

First Bite is becoming Restaurant Daily! Don't forget to subscribe at Apple Podcasts here and Spotify here.

Today’s episode is bittersweet, as it is the last episode of First Bite — but with an exciting twist. 

Starbucks and Grubhub announced a partnership on Thursday that would allow customers to order Starbucks delivery via the Grubhub app for the first time ever. The delivery partnership will roll out to select markets in Pennsylvania, Colorado, and Illinois in June, and expand to the rest of Grubhub’s markets across the 50 states by August. 

According to Grubhub, Starbucks is the most searched merchant on its app that is not yet available. Overall, Starbucks has been slower to partner with third-party delivery companies than many other top chains in the foodservice industry. While the company began offering third-party delivery through Uber Eats in select markets in 2018, Uber Eats delivery was not available nationally until 2020. Starbucks did not begin offering delivery with DoorDash until last January, and the partnership was not expanded nationally until March 2023. 

Grubhub is the final delivery company of the “big three” that Starbucks is now partnering with, though the company has the smallest delivery market share at 8% (as compared with DoorDash’s 67% and Uber Eats’ 23%), according to Bloomberg Second Measure.

Chipotle was one of very few winners from Q1’s financial reports and the company’s momentum certainly didn’t start there. In fact, you’d have to go back to the second quarter of 2020 – the pandemic quarter, if you will – to find a negative same-store sales number.

The company’s engine has no doubt been churning at full speed of late, as evidenced by share prices jumping by nearly 75% since October alone. There are several factors pushing the company to new heights, including a sharpened focus on throughput and a prioritization of the employee proposition. For that latter piece, Chipotle has continuously evolved its benefits to include mental healthcare, expanded parental leave, tuition reimbursement, English as a Second Language classes, pet insurance, and more. Most recently, the company added a service that provides faster access to paychecks, as well as a matching contribution to 401(k) workers’ student loan repayments. This continuous evolution of benefits is informed by town hall meetings each quarter, a “pulse survey” every other year that goes out to all the company’s 120,000 employees, and a benefits department that is highly in touch with workers’ changing demands.

Customers found a loophole in McDonald's $5 meal deal. Fast-food restaurants in a California city are switching to reusable cups. And two big AI suppliers are joining forces.

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Less than a week after abruptly closing nearly 50 California locations, Rubio’s has filed for Chapter 11 bankruptcy protection. The company said it is pursuing this action to facilitate the sale of the 41-year-old business, adding that its remaining 86 locations in California, Arizona, and Nevada will continue to operate as is.

The company has cited challenging economic conditions, diminishing in-store traffic driven by sustained work-from-home trends, rising food and utility costs, and “significant increases to the minimum wage in California.” On April 1, California’s minimum wage increased by 25% to $20 an hour.

Rubio’s is seeking court approval to continue operations during the sale process to ensure continued payment of employee wages and benefits. All gift cards and rewards will be honored at the remaining 86 locations.

Utah-based dirty soda chain Swig announced Monday the appointment of former Dutch Bros executive, Daniel Batty, as the fast-growing concept’s first chief development officer.

In jumping from one fast-growing beverage chain to another, Batty will help Swig to achieve its long-term goal of growing from 70 locations to 1,400 units over the next eight years.

Swig is best known for being at the forefront of the dirty soda beverage trend — which combines soda, dairy creamer, and flavored syrups and is popular in Utah — and was one of the fastest growing new concepts last year. According to Technomic Top 500 data, Swig had the second-fastest sales growth rate across the beverage and snack category at 39.1%. Swig also had the third-fastest unit growth rate in the category, behind only Crumbl and HTeaO.

With an ambitious long-term goal of building more than 1,300 stores in mind, the company will probably be about 900 franchised shops and 500 corporate stores, with corporate growth likely to move along quicker than franchise growth. Batty is currently in talks with the Swig leadership team to put a development plan in place.  

Cracker Barrel Old Country Store – the brand best known for rocking chairs out front, a gift shop of tchotchkes inside, and for being the restaurant of choice for road tripping families — has been struggling for a long time.

After several quarters of negative traffic and sales, new CEO Julie Felss-Masino announced last month that the family-dining chain would be undergoing a brand makeover to become more relevant, with five pillars of change, ranging from store remodels and tech investments to menu changes and pricing. While brand makeovers are not unusual (Domino’s and Papa Johns both announced new strategic overhauls at the start of the year), Cracker Barrel needs to walk a pretty narrow balance beam of modernizing the brand without drifting from the kitschy, homey vibe the chain is famous for.

During Cracker Barrel’s investor update call, which was hosted just two weeks before the company’s Q3 quarterly earnings, Massino broke down the ways in which the company is trying to dig itself out of the red and onto a positive path forward. While these company updates typically don’t pique the interest of the public outside of investor and restaurant news circles, mainstream media picked up the story, and Cracker Barrel was trending on X, the social media platform formerly known as Twitter.

While pricing continues to be a hot topic and challenging conundrum for restaurant operators in 2024, Domino’s Pizza is confident in its firm stance on the pizza delivery value equation. The Ann Arbor-based company purposefully did not raise prices last year and has not done so thus far this year, which has been beneficial for the bottom line, Domino’s CEO Russell Weiner said in a fireside chat during the annual Bernstein’s Strategic Decisions conference.

As most quick-service restaurant chains struggle to balance profitability with perception of value and affordability, particularly for lower income consumers, raising prices has been a common strategy. However, as NRN recently reported, 78% of Americans now believe that fast food is a luxury purchase, according to a new LendingTree study.

According to Russell Weiner, Domino’s saw the writing on the wall about consumer spending in this inflationary environment and pumped the brakes on pricing a bit earlier than most. 

BurgerFi announced that it would be rebranding to ChickenFi as it introduces new chicken sandwiches. There is no indication if this is a permanent rebrand or a temporary marketing move.

The Fort Lauderdale, Fla.-based fast-casual restaurant brand debuted a fried-chicken sandwich and a grilled-chicken sandwich on its permanent menu on May 21.

The chain’s chicken breast is prepared sous-vide. The new sandwiches come grilled or hand-breaded and fried, topped with fresh lettuce, tomato, pickles, and honey mustard.

The new sandwiches join the brand’s Jumbo Chicken Wings, Chicken Tenders, and Grilled Chicken Bowls.

Since the debut of Popeyes’ chicken sandwich in 2019, there’s been a surge in chicken-sandwich products across the industry, many brands trying to chase Chick-fil-A’s success in the category.

Technomic data shows that chicken sandwiches are continually increasing on menus despite their seeming ubiquity. In 2023, chicken sandwiches grew on menus by 0.4% and the five-year growth is expected to be 1.1%.

A recent CNN study of earnings calls and analyst notes finds that the word of the summer – on Wall Street, at least – is “bifurcation,” or the division of something into two parts. In this specific instance, bifurcation means that high-income consumers are plugging along just fine, while low-income consumers are really starting to struggle.

Indeed, 80% of American households have less cash available than they did in 2019, while credit card debt has reached a historic high. Meanwhile, a JP Morgan survey found that over 70% of low-income consumers are having a hard time making ends meet. Notably, middle-income households are also feeling pinched; 67% believe their income is falling behind the current cost of living.

The fast-casual category first became a thing in the 1990s (about the time Chipotle emerged) and came of age in the 2010s following the Great Recession, when consumers wanted more bang for their buck in the form of value, speed, and quality. The category came to be defined as a sort of elevated QSR but without the full-service component of casual dining.

Fast forward to this post-pandemic environment and fast casual has become a rare sweet spot of growth for the industry as price point lines continue to blur between segments. In the past several quarters, as inflation-weary consumers pull back on visits to most casual-dining concepts and some quick-service concepts, fast-casual players like Potbelly, Chipotle, Wingstop, CAVA, and Shake Shack have enjoyed traffic lifts — in some instances quite significant. The segment has also outperformed on sales. According to recently released Technomic data, fast-casual sales in 2023 grew by 11.2%, followed by quick-service sales at 7.9%. Family-dining restaurants grew by 5.7% and casual-dining chains grew by 4.7%.

No matter how it’s defined, growth in any capacity requires capital and capital remains expensive; the Fed raised interest rates 11 times between March 2022 and July 2023 to combat relentlessly high inflation. A cooldown has yet to happen, which has kept a lot of investors on the sidelines.

Of course, there’s an ironic twist at play here. Those rates remain high because demand remains high. Driving much of this environment is a sturdy set of consumers with more wages in their pockets and a continued pent-up demand from the pandemic. Those consumers, especially younger ones, have also proven that they really, really like to frequent restaurants. And so here we are, with a murky understanding of what exactly growth means at this post-pandemic juncture.   

The consensus is that most of the industry’s growth from this point will come from higher demand concepts focused on convenience. High rates haven’t derailed the quick-service or fast-casual segments, for instance, or many bigger players in general. According to Technomic data, the top 500 chains increased sales in 2023 by $31 billion, or nearly 8%. During the recent Restaurant Leadership Conference, Technomic Managing Principal Joe Pawlak called it a “very, very strong growth year” for those at the top.

The most popular technology tool on display at the 2024 National Restaurant Association Show in Chicago was mostly invisible. What do the robotic arms, POS systems, back of house analytics tools, and more booth gadgets have in common? Most of them are powered by and supported by data. Data — whether it’s collected by machine learning or AI — has proven to be the universal currency of restaurant technology in 2024 and beyond.

Operators are waking up to the significance of data collection and optimization in operational decision-making, from employee scheduling and inventory management, to marketing data about customers. This was especially evident at the Restaurant Show, where almost every booth at the tech pavilion went into detail about the data their software (and sometimes hardware) provides.