Fast-food giants like McDonald’s and Burger King have long battled each other for market share. But with rising tariffs threatening to hike menu prices, the competitive set is shifting. A new—and potentially more dangerous—rival is emerging: value-focused full-service restaurants like Chili’s, Applebee’s, and Outback Steakhouse.
Consumers have made one thing abundantly clear: price hikes are a dealbreaker. In a new Zappi survey of 1,000 U.S. consumers, more than one-in-three (34 percent) say they’d stop buying fast food if prices rose just 5 percent. In contrast, only 17 percent said they would continue buying regardless of price increases. In a category with razor-thin margins, this dynamic poses an existential threat among brands that built their dominance on affordability and convenience.
At the same time, casual dining chains have risen from the proverbial ashes to capitalize. They’re slashing prices, streamlining menus, investing in experience, and going viral. For just a few dollars more, consumers are being offered a sit-down meal, table service, and a fun, social atmosphere. Suddenly, eating in your car doesn’t look like such a great deal.
The result? A fundamental reshaping of the value equation. QSRs aren’t just competing against each other anymore. They’re up against an entirely different proposition: value and experience-driven competitors.
Chili’s is winning on the internet, and with Gen-Z
Few chains have capitalized on this shift like Chili’s. The brand is riding a wave of cultural momentum—and the numbers prove it. Sales of Chili’s fan-favorite “Triple Dipper” were up 70 percent year-over-year in Q3 2024, accounting for 14 percent of total sales as of Q2 2025. That boost has been largely driven by Gen Z consumers, who have made a game out of sharing dipping combos and Chili’s runs on TikTok.
Chili’s isn’t just benefiting from virality—it’s leaning into it. From big activations like a restaurant in Scranton, Pennsylvania, themed on cult-favorite “The Office” to reinvigorating its brand with a new voice. Its messaging is confident and tongue-in-cheek (one campaign for its virtual brand It’s Just Wings declared: “Our prices are stupid”). It’s positioning itself as the place where people can get a great deal and have a good time—and it’s inspiring regulars. In Q2, same-store sales saw a 31 percent increase YoY with total traffic up 20 percent.
Other FSRs are copying this playbook. Outback Steakhouse has struggled of late, making sweeping layoffs and constricting its footprint to focus on the US. The casual chain also announced its plans to cut menu items by 20 percent and move away from “limited-time offers” to the notion of “abundant value” baked into its new menu. Chili’s has set the playbook for numerous other brands in the space to copy.
The Consumer Mindset Is Shifting
This isn’t just anecdotal. Our data shows that consumers were eating out significantly less even before tariffs. Nine-in-ten consumers are making tradeoffs because of rising prices. The most common actions they’re taking are cooking at home more (49 percent), reducing impulse buying (45 percent) and cutting down on fast food (44 percent). When consumers are eating out less, it creates even more competition for their loyalty.
At the same time, consumers aren’t willing to pay more for less. While tariff-driven price increases are mostly out of brands’ control, how they respond to them isn’t. And right now, QSRs are in a precarious position: raising prices risks alienating core customers, but cutting corners on quality or service makes them even more vulnerable to experience-driven competitors.
Meanwhile, casual dining brands are pushing a message that resonates: abundant value, craveable food, and lively atmosphere.
What QSRs Can Do to Stay Competitive
This moment calls for a strategic reset. Here’s how fast-food chains can respond:
1. Get back to fundamentals.
Tariffs will hurt, but not everyone will be equally affected. The brands that survive will be those that serve the consumer who still cares most about price and convenience. Don’t lose sight of that core customer. Offer clear value without gimmicks.
2. Be authentic and transparent.
Consumers aren’t naive. 70 percent of consumers surveyed by Zappi understand that tariffs raise the price of goods, but that doesn’t mean they accept them. Don’t try to spin patriotic sourcing stories or vague economic benefits. Instead, clearly communicate what you’re doing to preserve value, quality, or convenience. Earn their trust.
3. Prioritize long-term loyalty over short-term profit.
If younger consumers are discovering restaurants through TikTok and viral reviews, then that’s where you need to be. Don’t just chase the next menu hack—build culturally relevant, emotionally resonant moments that people want to share. That’s what drives loyalty in 2025.
The dynamics in the dining industry are shifting fast. With tariffs adding pressure and value-driven full-service chains offering compelling alternatives, QSRs need to rethink what “fast and cheap” really means. Because in a world where a $17 buys you customizable menu options and social clout, a drive-thru burger just won’t cut it anymore.
Nataly Kelly is the Chief Marketing Officer at Zappi. Her latest book, Brand Global, Adapt Local, comes out in June 2025. A former Fulbright scholar in sociolinguistics, her prior books include Take Your Company Global and Found in Translation.
