Over the past two years, consumers have dined out less frequently and grown pickier about where they eat, according to data from Black Box Intelligence. While "value" has been the dominant buzzword for restaurant executives, encompassing more than just menu pricing, industry CEOs are now turning to their corporate chefs to compete on quality and taste, broadening their definition of value.
Discounts and one-off promotions can lift traffic for a time, but the actual product still matters for long-term growth and franchisee profitability.
From Wendy's to Chipotle Mexican Grill, chief executives touted new or upcoming improvements to menu items on their quarterly earnings conference calls in recent weeks. Chipotle CEO Scott Boatwright told analysts on the company's call in late October, referring to the burrito chain's brisket: "We think the product's improved and even better."
For some chains, better food is a key step in ambitious turnaround plans. "Quality food at real value" is one pillar of Wendy's five-part turnaround strategy unveiled on Thursday. "We're also rebuilding our food offerings and have begun testing improvements to quality and craveability of our core items, including thicker, crispier bacon, a richer and creamier Frosty, whole leaf lettuce on sandwiches and improved salads," Wendy's CEO Bob Wright told analysts on the call that day.
The same day, the company reported its seventh straight quarter of same-store sales declines and publicly rejected a $1.4 billion takeover bid led by Nelson Peltz's Trian Partners, saying the proposal did not account for the potential value its turnaround plan could unlock.
There is precedent to suggest better-tasting food can contribute to higher sales. In 2009, Domino's Pizza changed its recipe, swapping out its sauce, adding garlic to its crust and switching to shredded mozzarella with a hint of provolone. Along with blunt commercials comparing its previous crust to cardboard and old sauce to ketchup, the changes helped spur U.S. same-store sales growth of 9.9% the following year.
Now, some of the same team that led the Domino's turnaround is copying the playbook at Burger King's U.S. restaurants. Part of the chain's multiyear comeback plan has focused on revamping core menu items. It started earlier this year with the Whopper, which received a better bun and a new mayonnaise. In September, it rolled out an overhaul of its nuggets, switching to 100% white meat, crispier breading and a more flavorful marinade, and reformulated its sauces.
"We've tried to look at our biggest categories first," Josh Kobza, CEO of Burger King parent Restaurant Brands International, told CNBC. "We've also thought about the ones where the fixes are more straightforward and less operationally involved."
Following the changes, Whopper sales were up by a double-digit percentage in the third quarter, Kobza said on the company's earnings call in late October. Nugget sales climbed more than 35%, and Burger King said its U.S. same-store sales jumped 8.4% in the quarter.
Better-tasting food isn't just for chains in trouble. Chili's, which has seen same-store sales soar 52% over the past three years, is improving more of its existing menu options. After tackling its baby back ribs, burgers and nachos, it will turn next to salads and steaks, Brinker International CEO Kevin Hochman told CNBC. "We're going to be doing more dry aging of our beef to make it more tender, versus doing it in a plant," he said. "It's a little bit more expensive, but we think the taste is going to be a whole lot better."
Chili's rival Applebee's launched a juicier chicken tender during its latest quarter, according to John Peyton, CEO of parent company Dine Brands. In 2027, Applebee's plans to overhaul more of its protein options. "We think proteins are, number one, our biggest opportunity," Peyton told CNBC. "Number two, they're a big focus of the way people are thinking about eating right now, leaning into proteins and a little bit less with the carbs."
Chicken is also a focus for McDonald's, which is testing hand-breaded wings, strips and a sandwich in a handful of Chicago-area restaurants. It plans to expand the trial to more locations in the U.S. and Ireland in early 2027. McDonald's is also trying to improve its coffee with fresher beans and upgraded equipment, executives said at the company's investor day in September. Both chicken and coffee are fast-growing categories, offering more opportunities to lift sales than its signature beef burgers.
While not in full turnaround mode, McDonald's U.S. business has struggled in recent quarters after its value strategy didn't gain the traction hoped for. In the third quarter, its U.S. same-store sales fell 0.2%. In addition to menu tests, McDonald's is leaning into training to improve the quality and consistency of its core menu items. Starting in October, it launched "Make It Golden," a multiyear training program for corporate employees, restaurant workers and franchisees.