A market of extremes: How 2026 will impact restaurant winners and losers

Core Insights - The recent restaurant earnings season has highlighted a significant divide between consumer segments, with some continuing to spend freely while others have reduced discretionary spending due to economic uncertainty [2][4]. Consumer Trends - There is a notable bifurcation in brand performance, with struggling brands facing challenges while those investing in holistic value and brand turnarounds are experiencing sales revivals [3]. - Low-income consumers have seen a steep decline in activity, particularly affecting brands that rely on this demographic, while high-end consumers remain stable, especially in sit-down dining [4]. - The shift in consumer behavior is partly attributed to a convergence of prices across dining segments, leading to increased competition [5][6]. - Consumers are seeking better value for their money, prompting a shift towards options that offer larger portions, innovative menu items, or perceived premium ingredients [6]. - The competitive landscape has intensified in the $10 to $12 price range, with consumers demanding more value than in previous years [7]. - Brands that successfully attract consumers across different income levels are those that provide holistic value, while clear dollar values remain significant indicators of value for consumers [7].