When McDonald’s CEO Chris Kempczinski said publicly that combo meals priced above $10 were damaging value perception, it forced the company to lean into value meals to restore traffic. That is the kind of structural fix that comes after value perception has already eroded. The challenge is that a value problem cannot be solved with discounts alone. Consumers may respond to promotions in the short term, but long-term loyalty is built on something much more fundamental.
The National Restaurant Association has estimated that the restaurant industry could generate as much as $1.5 trillion in sales in 2025. At the same time, recent operator survey data shows a much tougher reality at the store level. Nearly 40 percent of operators reported same-store sales declines in early 2026, while almost half reported lower traffic. The biggest concerns remain labor costs, food costs, sales growth and the broader economy.
That is the tension operators are managing today. The industry can be large on paper and still unforgiving inside the four walls.
Too often, brands respond by chasing traffic with coupons, promotions and lower-priced bundles. Those tactics can generate short-term visits, but if the economics underneath them do not work, the strategy eventually breaks down. Value has to be built into the business before it appears on the menu board. Operators who rely too heavily on discounting eventually find themselves in a difficult position, training customers to expect lower prices while simultaneously putting more pressure on already thin margins.
Consumers know when portions shrink. They know when quality changes and when they are being asked to pay more and receive less. Operators sometimes convince themselves those changes are invisible, but they are not.
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At the same time, operators cannot ignore cost pressure. Reuters reported that hospitality wages rose 3.8 percent year over year, menu prices increased 3.9 percent and beef prices climbed 17 percent. Those costs have to be absorbed somewhere, but the question is where.
Too many conversations begin with what can be removed from the guest experience. A better starting point is asking where the operation can become more efficient. That means examining purchasing practices, labor deployment, inventory management, throughput and menu complexity before asking customers to absorb the difference.
One of the most overlooked profitability levers is menu simplification. Every SKU carries costs that extend far beyond food. Additional menu items create inventory complexity, increase training requirements, slow execution and reduce purchasing leverage. In many cases, operators can improve margins not by charging more, but by operating a simpler business.
That is why menu architecture should be viewed as an economic decision, not just a culinary one. The goal is not to offer the most options. The goal is to offer the right options while maintaining strong unit economics. The operators that do this well create consistency for guests and profitability for franchisees at the same time. The best menu decisions are often the ones customers never notice because the experience becomes easier, faster and more reliable.
The evidence from other operators reinforces this. Chili’s, a casual dining brand rather than limited service, simplified its menu, paired strong value offers with premium items and grew sales while competitors were cutting. The through line in both cases is the same. They chose their hero offers deliberately and protected the economics behind them.
The same principle applies to value. Not every customer defines value the same way. For some, value means the lowest possible price. For others, it means convenience, speed, portion size, customization or nutritional quality.
The National Restaurant Association’s consumer research found that 75 percent of restaurant occasions are now takeout, nearly 95 percent of consumers consider speed important and 60 percent of Gen Z and millennial consumers say they are ordering takeout more frequently than they did a year ago. Those findings suggest that value is no longer simply about price. It is increasingly tied to convenience, reliability and relevance.
That shift should force operators to think differently. Winning on value does not necessarily mean offering the cheapest meal. It means creating an experience that customers believe is worth the price while maintaining economics that work at the store level.
The reason all of this matters is that profitability remains the most honest measure of brand health.
Restaurant leaders spend a great deal of time discussing traffic, digital adoption, loyalty programs and development pipelines. Those metrics matter, but they are outcomes, not foundations. A restaurant can generate sales growth and still struggle if the underlying economics are weak.
Throughout my career, I have come back to the principle that sales do not build the next store, but rather profitability does. Strong unit economics create reinvestment. They allow operators to remodel restaurants, invest in technology, hire better people and pursue development opportunities. Weak unit economics eventually limit every one of those decisions. Franchisees build additional locations when they believe the economics work. They reinvest in the brand when they trust the return on that investment. Profitability is what creates that confidence.
Recent industry data reinforces this point. According to the James Beard Foundation’s 2026 industry report, restaurants that raised prices by more than 10 percent in 2025 were the most likely to report lower profits. More than 40 percent of operators that added online ordering and delivery also reported lower profitability from those channels. Growth initiatives have to be judged by contribution margin and unit economics, not adoption rates alone.
That is why value and profitability should never be viewed as competing priorities. They are connected. Operators cannot deliver sustainable value to customers if the economics do not work. Likewise, operators cannot build sustainable profitability if customers no longer believe they are receiving value.
The brands that will outperform over the next decade are not the brands that discount the most aggressively. They are the brands that understand a simple reality. Sustainable growth starts with four-wall economics. Everything else is built on that foundation.
Matthew Walls is president and chief stores officer at Edible Brands®, where he oversees operations and franchise growth across the company’s portfolio. He has more than 25 years of experience in restaurants and franchising, with previous leadership roles at Domino’s, CKE Restaurants and Caribou Coffee.
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