Operational Excellence and the Value War   

Technomic’s revised predictions for 2024 revealed a challenging road ahead for the restaurant industry, which has been plagued by rising prices and shifting consumer behavior since the onset of the pandemic. The first half of 2024 saw a decline in traffic that was significant enough that the data and analytics firm reduced its original forecast from a 5.3 percent sales increase by 1.5 percentage points to 3.8 percent. Although these expectations are in line with pre-pandemic growth rates, the projected 3.7 percent rise in prices means that sales growth may barely keep up with inflation. 

To combat this, many chains are engaging in a “value war,” by discounting menu items or offering bundled meal deals. While restaurants that successfully pivot to address this demand for value may grow or maintain their sales, these brands could find themselves making other cost-saving operational changes, like reducing portion sizes, to account for this trend. 

Instead of engaging in this…