The quick-service industry had a difficult time attracting customers in the first quarter.

U.S. traffic for limited-service chains fell 3.5 percent year-over-year, according to Revenue Management Solutions. It marked a steep decline from Q4 2023, which saw visits dip 1.7 percent. Several companies attributed the lack of customers to severe weather patterns in January (colder temperatures in Southern states). Sure enough, during that month in particular, traffic dropped 4.5 percent, lapping a 1.7 percent decline during the prior year. The figure improved to a decrease of 2.1 percent in February. Revenue Management Solutions also chalked up the poorer performance to quick-service chains comping against strong Q1 2023 traffic driven by promotions.

Net sales rose 0.8 percent, boosted by an average check increase of 4.5 percent that occurred because of a 4 percent rise in average price. Items per order increased 0.5 percent in the quarter, but that’s comparing against negative order sizes in 2023.

Menu price inflation has decelerated for nearly a year, but that appears to be coming to an end. Revenue Management Solutions hypothesized that could be because of California, which had a new fast-food wage law go into effect in April. The measure calls for a minimum wage of $20 per hour for quick-service employees and a statewide council to monitor everything going forward. Chipotle rolled out a 3 percent price hike last fall and expects to take another mid-to-high single-digit increase to offset the impact of the new law. Minimum wage experts at the University of California, Irvine, estimate that overall prices will spike between 2.5–3.75 percent, on top of ongoing inflation.

In March, California ranked third in overall burger price ($7.16), inclusive of the quick-service and full-service industries. It also ranked fifth in chicken sandwich price ($6.23) and pizza price ($18.07) Below is a deeper look at states ranked by the most expensive burgers, chicken sandwiches, and pizza.

StateChicken Sandwich

Broken down by daypart, lunch traffic fell 5.3 percent year-over-year and declined two percentage points compared to Q4 2023. Meanwhile, dinner dropped 1.4 percent.

Breakfast decreased 2.2 percent, but that’s part of an upward climb since Q3 2023. A handful of chains are putting heavier investments into the morning time. No one has done that more so than Wendy’s arguably, which launched a breakfast platform in March 2020 and has been zeroing in on the category ever since. In February, recently hired CEO Kirk Tanner told investors that the brand will use $55 million worth of incremental company advertising to push breakfast in the U.S. and Canada, split evenly between 2024 and 2025. McDonald’s has a major strategy too, with a planned national rollout of Krispy Kreme doughnuts. These products will be delivered fresh every day and be available in packs of six or individually. Burger King has also put a greater emphasis on breakfast by testing a series of menu innovations, like the Breakfast Grill’wich Sandwich and the Smoky Maple Chicken Biscuit.

In terms of revenue channels, delivery was the best performer, with traffic rising 10 percent year-over-year, although that’s a decline from the third quarter and fourth quarter. Takeout increased 8.5 percent year-over-year and dine-in lifted 6.3 percent. Drive-thru traffic fell 10.7 percent compared to Q1 2023 and dropped quarter-over-quarter.

Consumer Trends, Fast Casual, Fast Food, Story