Most restaurant industry folks have conceded that 2025 didn’t quite go the way it was expected to go coming into the year.

“We were all fired up in January. Everything’s changed,” Bank of America managing director and head of the restaurant group Cristin O’Hara said during a recent interview. “That buoyance we had in January quickly tailed off because of uncertainty.”

Uncertainty, she added, is the obvious “word of the year” winner, driven by a confluence of factors from tariffs to interest rates, layoffs to consumer sentiment, and, of course, lingering inflation.

“We thought there would be momentum and that just hasn’t happened. Uncertainty does not breed growth or feelings of confidence,” O’Hara said.

What’s more is that some metrics, like consumer sentiment, have even gotten worse. Bank of America data, for instance, shows that one out of four consumers are now living paycheck-to-paycheck.

“That’s not a good set of circumstances for QSR, or really anyone in a discretionary (spending) environment,” she said. “When people are living paycheck-to-paycheck, they have to make some hard decisions.”

As more consumers become more selective, the restaurant industry is shifting into an intensifying market share game, she added. The winners are further separating themselves from the rest of the pack and O’Hara doesn’t expect this trend to change anytime soon. Of course, moving into that “winners’” bracket is easier said than done, but it’s not impossible.

Here’s how brands can gain share in 2026.

Expand the idea of ‘value’

The current value environment began proliferating in earnest in the middle of 2024 and has continued to intensify and evolve. Still, traffic remains pressured. That’s because the definition of “value” has evolved to include much more than price, and brands that don’t evolve with it will be left behind.

“Price is just the denominator now,” Revenue Management Solutions chief executive officer John Oakes said during a recent interview. “It’s about everything else you get on top. The big focus now is on understanding what other things we can do to make sure we’re providing great value without just hitting price. Going into next year, there will be more needed conversations about taking less price than inflation.”

Oakes added that Chili’s is a perfect example here: “There’s not nearly as much of a gap between casual dining and QSR right now. At Chili’s, you’re getting what you’re paying for, including an entire experience.”

O’Hara added that QSRs don’t have leverage to keep raising prices anymore, as evidenced by continued negative traffic in the segment. Indeed, most brands are planning to be more conservative on price and focused on making sure they’re growing their business with more than just check, Oakes added.

Even so, O’Hara expects the fragile consumer environment to continue in 2026, particularly for lower-income consumers.

Shifting focus

But, she added that the industry’s current struggles aren’t just consumer-driven.

“There are brands with plenty of problems. Look at Wendy’s. They have a corporate C-suite strategy problem,” O’Hara said. “There’s only so much math you can do to make it work and it’s not just consumers, but some brands needing a reset.”

For context, Wendy's is currently searching for its third CEO in two years and interim CEO Ken Cook recently put "Project Fresh" turnaround plan into place after the chain has experienced struggling sales most of this year.

Perhaps because of these higher-level challenges, more restaurant companies are focusing on four-wall profit growth rather than net unit growth. Further, more franchisors are keeping a stronger pulse on franchisees’ financial performance, according to Oakes.

“There are more conversations about franchisees’ (profit-and-loss statement) data because that’s how they make money, and because of the environment,” he said. “That’s the data telling (franchisors) what actions need to be taken to improve the business. You have to have some profitability, but brands have to service higher amounts of debt than they did a few years ago. We’ve seen a really big focus shift to unit-level economics.

“Because of this, I think we’ll stay a little conservative on net new unit growth and try to steady the ship a little bit.”

Scale and simplicity matter

Also in this environment, simplicity and scale matter, and perhaps more than ever. O’Hara points out some of the strongest brands as an example, such as In-N-Out Burger, Raising Cane’s, and Chick-fil-A.

“Those guys have management, scale, and simplicity. If the menu is specific, maybe you have more leverage than somebody that is spread too thin on the menu board,” she said. “Those with scale can also afford to get the message out with good marketing, they can afford LTOs, and they can maybe do some discounting. Those with financial flexibility are typically the ones with scale and simplicity.”

Pushing through continued pullback

That said, even if brands find the right value proposition, find the appropriate amount of visibility into performance metrics, and achieve the right levels of scale and simplicity, that doesn’t mean consumers are going to come rushing back. O’Hara said the consumer set will remain pressured in 2026 and closures will likely continue as brands are forced to step up their unit-economics’ game.

Amid such continued uncertainty, consumer insights researcher Lisa Miller said the industry will need to create its own momentum and drive its own demand in 2026 because “macro recovery won’t do it for them.”

“Even when fear lessens, diners aren’t rushing back. The emotional economy is more sensitive than it’s ever been. Our data shows that guests are cautious, spending is selective, and small shocks create big pauses,” Miller said.

She added that it’s critical for operators to be agile.

“The external environment isn’t the iceberg. Internal resistance to change is,” she said, adding that brands need to move away from slow decision cycles, blaming external forces, and clinging to the past — or, doing “things the way they’ve always been done.”

“The operators who move fast, test fast, and reduce friction inside their own four walls will win in 2026,” she said.

Source: Alicia Kelso, Nation’s Restaurant News