Fast food restaurants are such an integral part of American culture that the relative strength of the currency and inflationary pressures can be linked (though sometimes imperfectly) to the price of a Big Mac. In 2023, so-called Big Mac inflation was high, and fast food restaurants responded to economic pressures by raising prices, largely passing the burden of high costs on to consumers. But 2024 was a different story, with major operators emphasizing cheap menu deals aimed at increasing customer attrition due to price concerns.

With renewed concerns about a potential economic downturn, consumers are once again rethinking the way they shop and consume food, with an increased focus on what offers them good value for money. Data from Morning Consult shows that the discounting approach is not having a major impact on the perception of QSR chains as good value, even though it may lead to an increase in footfall.

High discounts do not change the value perception of fast food

While fast-food restaurants typically offer their deepest discounts in the early months of the year, when consumers try to save after holiday spending, many are changing their strategy this year. To counter declining customer traffic and sales, various QSRs have extended their offers and even introduced new ones through the summer of 2024. Unfortunately, these actions have yet to materially change consumers’ perceptions of industry value. The net value of an aggregate group of QSR restaurants, defined as the share of U.S. adults who say a given brand’s products offer a good value relative to their price, minus the share who say they offer a poor value, has actually remained stable since the start of 2024. But that’s not the whole story. Net purchase considerations — perhaps a better indicator of the potential success of this strategy — have increased, albeit only slightly.

Another positive sign is the fact that quick-service restaurants are outperforming fast-casual chains – a key competitive segment – in each of these metrics. In fact, net scores for the fast-casual group have declined across the board, with a notable drop in net score of nearly 5 points. While discounts may not have dramatically changed the value perception of fast-food restaurants, they are widening the perceived value gap between fast food and fast casual.

QSRs must compete against the inflationary trend towards cooking at home

Fast-casual restaurants aren’t the only competitors to the big QSR chains. When economic concerns arise, consumers often change their eating habits. Some go to the supermarket less often, buy bulk or generic products, or cook at home more often to save money. While many fast-food menus have been positioned as a nod to low-income consumers, they are also the group of consumers for whom cooking at home has become more common since the beginning of the year.

The share of low-income adults who say they cooked from scratch at home without a recipe at least once a week has increased as inflation has risen throughout 2022. After beginning to decline as inflation cooled in late 2023, it began to rise again this year, increasing 5 percentage points between February and May.

Notably, the latest data comes from May, before some restaurants began rolling out their new low-cost offerings on a large scale. At the same time, it suggests a general change in behavior that, if entrenched, could be difficult to reverse, especially if the economy worsens.

Fast food restaurants have a Gen Z problem

Traditionally, a key target audience for fast food outlets are parents with young children who value the convenience of a quick meal. However, the demographics of parents are changing as more Gen Z members have children of their own, and fast food outlets face an uphill battle to win their favor.

Compared to other generations, Gen Z is the least likely to say that fast-food restaurants offer a good value, and they are also less likely than Millennials and Gen X to say they would consider visiting a quick-service restaurant. And importantly, both of these numbers have either decreased or remained constant for this group since the beginning of the year, while they have increased for others—in fact, net purchase consideration has increased for every generation except Gen Z.

To reach this important audience, quick service restaurants must look beyond short-term value propositions. This may mean constantly evolving menu items, as Gen Z is more likely than others to try new foods and drinks on a regular basis and is looking for novelty and discovery. Or it could mean using loyalty programs to give Gen Z early access to new menu items that they are more likely to show interest in than other generations. Evolving to meet these mindsets and behaviors will position the category for future success with this important consumer group.

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