Why fast food industry watchers expect big discounts in the first half of 2025

globalnews.ca:

It’s lunch time at the Eaton Centre mall in downtown Toronto and every corner of the food court is hungry for customers.

Bourbon St. Grill is trying to lure them in with a pair of beef or chicken Jamaican patties for $5 and a “budget-friendly” meal for students priced at $10.99.

Nearby, New York Fries is hoping a $7.49 hotdog and pop combo designed for “lunchfast, lupper or snacktime” will do the trick, and over at Sansotei Ramen, it’s all about an offer knocking $2 off tonkotsu or spicy tan tan.

This onslaught of promotions has taken shape at just about every fast-food joint across the country, and the phenomenon has intensified into what industry watchers have dubbed a “value war.”

They’re predicting the battle for your buck isn’t going away anytime soon and may even hit new heights next year.

“It’s going to be at least the first six months of 2025, when we’re going to be seeing elevated promotions, but it’s likely going to be the entire 2025,” said Danilo Gargiulo, investment research firm Bernstein’s senior analyst specializing in restaurants.

The value war didn’t materialize overnight. Consumer habits shifted in the years coming out of COVID-19 lockdowns, when government supports and a lack of opportunities to go out boosted savings.

When health measures were lifted, people spent the cash they were sitting on, but as prices, interest rates and inflation spiked, consumers pulled back.

For fast food chains, that meant diners ditched sides, opted for snacks instead of larger meals or even avoided quick-serve restaurants altogether.

The decrease in customers has persisted even as inflation eased, leaving the quick-serve industry with a big question: how do we get customers back into restaurants and spending again?

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