‘Tis the season to reflect on the year. And suffice it to say that 2024 was challenging beyond anyone’s expectations.
After enduring about two years of historic inflation and outsized menu prices, consumers simply stopped going to restaurants as much toward the end of last year and the beginning of this year. Restaurant brands across the board began implementing value strategies in the second quarter to win them back, and Q3 marked the first full quarter of an all-out value war. Several executives noted the “complex consumer environment” while outlining their varying strategies to navigate through it without pressuring margins too much.
Simultaneously, another massive theme emerged during the year: a record number of restaurant bankruptcies impacting legacy brands like TGI Fridays, Bucca di Beppo, and Red Lobster, as well as once-thriving disruptors like World of Beer Bar & Kitchen, Tender Greens and Tocaya, and Melt Bar & Grill, and even franchisees for Arby’s, Pizza Hut, and Dickey’s Barbecue Pit. No segment was spared as concepts took on debt to get through the pandemic but struggled as that debt became more expensive and as consumers stopped coming as much.
“There’s no question this year has been a challenge. When we started the year, we thought inflation would decelerate a lot quicker, which would lead to some uptick in visits. That didn’t happen,” Technomic senior principal David Henkes said. “Instead, inflation was raging and consumers increasingly felt worse about their own situation, to the point where it got so bad we saw dealings strategies permeate not just the quick-service segment, but full-service as well. This showed the depths to which consumer pullback was real.”
Technomic even revised its forecast down slightly in September to reflect the persistent pressures. With such reflection as a backdrop, it’s also important to acknowledge that we’re coming up on a season of renewal. So, what does 2025 have in store? Given the unexpected pressures from 2024, there is some hesitancy to come up with confident predictions.
Contact Alicia Kelso at [email protected]
