How restaurants can increase value despite inflation
How restaurants can increase value despite inflation
The environment for restaurant operators continues to shift quickly. Inflation has moderated from its peak, but , keeping pressure on food, labor, insurance, occupancy and other operating costs. In this environment, focusing on restaurant revenue growth and long-term restaurant value has become increasingly important as operators look for ways to strengthen profitability and remain competitive, reports.
Consumers are still showing a , particularly at limited鈥憇ervice, fast鈥慶asual and experience鈥慸riven brands. At the same time, consumer behavior has become more discerning, with . In many cases, higher鈥慽ncome consumers are still spending and .
Another factor restaurants need to watch closely is the relationship between grocery prices and menu prices. As of 2025, average restaurant menu prices have increased over the same period. This brings the relative value equation back into sharper focus for consumers.
Increase restaurant value beyond price
To win in this increasingly complex and competitive environment, restaurant operators will need to find ways to attract consumers beyond deals and discounts.
鈥淥ne thing we continue to see is that value is perception, not just price,鈥 said Jeff Poe, managing director and head of restaurant and franchise with Fifth Third Corporate and Investment Banking. 鈥淐onsumers are willing to pay for indulgence, quality ingredients, speed, accuracy and experience when it鈥檚 executed consistently.鈥
Many of today鈥檚 strongest performers are . Companies such as Taco Bell, 7 Brew, Culver鈥檚 and Jersey Mike鈥檚 share common traits that support growth, strengthen profitability and contribute to higher restaurant valuation:
- Clear menu authority
- Speed and execution
- Consistent experience
- Strong culture and brand ethos
- Ongoing menu innovation supported by digital and social engagement
For beverage鈥憀ed brands like 7Brew, the combination of price, drive鈥憈hrough speed, customizable menu and an energetic, friendly experience has been especially effective.
What this means for M&A
For operators and brands considering growth, the takeaway is clear: Driving consumer traffic comes first. As restaurant operating costs continue to rise, businesses that deliver value to consumers in a disciplined, differentiated way are often better positioned to protect margins, strengthen financial performance and attract M&A interest.
鈥淲hen strong operations, smart growth strategies and the right capital come together, that鈥檚 when we see the best outcomes,鈥 said Charles Hurt, managing director and head of consumer M&A with Fifth Third Corporate and Investment Banking.
Moving forward for growth
Inflation continues to challenge the restaurant industry. Operators that establish menu authority, deliver compelling value without over鈥憆elying on discounts and stay disciplined on execution are better positioned to grow and to remain attractive in an active M&A market.
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