Taco Bell, Chili’s, Domino’s, and slop bowls victorious in quarterly American food fight

Inflation has changed the way American consumers decide where to eat, and that’s created some winners and losers among companies who serve food.

Most consumer-facing companies have reported that customers are increasingly value-conscious and pulling their purse strings. But consumers are actually spending more on food than they were prepandemic — they’re just getting pickier.

One category that has done well is fast-casual dining, which is somewhere in between a McDonald’s and an Applebee’s. As prices for historically cheaper restaurants have gone up, consumers may look to Chipotle or Wingstop as an upgraded experience that at this point doesn’t cost that much more than a Whopper combo meal.

Fast-food companies are starting to pick up on the fact that customers were not necessarily flocking to their restaurants for a high-quality meal. They’ve set out on a “value war,” as McDonald’s CEO Joe Erlinger put it to Bloomberg News in June. But so far, the one winning that war is Taco Bell.

David Gibbs, CEO of Taco Bell parent company Yum! Brands, said its success comes from courting two types of customers: those seeking a cheap meal, and those seeking something new and interesting, like its Cheez-It tostada. It’s a tried-and-true strategy from the company that brought you the Doritos Locos Tacos.

Chili's may be taking a note from Taco Bell. At a time when casual dining chains like TGI Friday’s and Red Lobster are filing for bankruptcy, Chili’s reported more than 14% same-store sales growth in the past two quarters.

Leadership at its parent company, Brinker International, attributed that growth to a wildly successful social-media campaign for the Triple Dipper appetizer. It’s also introduced value meals like a $10.99 “3 for Me” combo that rivals the price points of fast-food chains but with a burger that comes on a warm plate versus a paper wrapper.

Lastly, in its own distinct corner of the fast-food world, are the pizza chains. Only Domino’s has reported positive same-store sales growth in the past two quarters.

According to its leadership, it’s done this through aggressive promotional pricing like its “Emergency Pizza,” which is a free pizza voucher a customer can redeem after placing an order. “I believe value will continue to be in demand from customers around the world, and know that you’re hearing the same thing from my peers as macroeconomic and geopolitical issues continue to pressure the industry,” Domino’s CEO Russell John Weiner said.