How Chili’s and Cheesecake Factory are defying consumer gloom and beating McDonald’s and Chipotle at their own game
Investment
Fortune

How Chili’s and Cheesecake Factory are defying consumer gloom and beating McDonald’s and Chipotle at their own game

August 19, 2025
09:15 AM
4 min read
AI Enhanced
investmenteconomyconsumer discretionaryretailmarket cyclesseasonal analysiseconomic

Key Takeaways

Chili’s reported a 24% jump in same-store sales in its most recent earnings report.

Article Overview

Quick insights and key information

Reading Time

4 min read

Estimated completion

Category

investment

Article classification

Published

August 19, 2025

09:15 AM

Source

Fortune

Original publisher

Key Topics
investmenteconomyconsumer discretionaryretailmarket cyclesseasonal analysiseconomic

Economy·RestaurantsHow Chili’s and Cheesecake Factory are defying consumer gloom and beating McDonald’s and Chipotle at their own gameBy Marco Quiroz-GutierrezBy Marco Quiroz-GutierrezReporterMarco Quiroz-GutierrezReporterRole: ReporterMarco Quiroz-Gutierrez is a reporter for Fortune covering general news.SEE FULL BIO Vehicles sit parked outside a Brinker International Inc

Chili's Callaghan O'Hare—Bloomberg via Getty ImagesConsumers are scaling back on eating out, but are still willing to shell out for sit-down restaurants as the recent stellar performance for some brands indicates

Chili’s reported a 24% increase in same-store sales in its most recent earnings report

Meanwhile, brands such as McDonalds and Wendy’s have shown disappointing sales performances

Consumers are tightening their belts and eating out less frequently, but sit-down restaurants Chili’s and Cheesecake Factory are persevering because they’re dering more value for the same price as fast food

Increasingly tight economic conditions are forcing consumers to reevaluate their spending, including how much they spend on eating out. one-third of Americans said they’ve cut back on eating out and food dery since the start of the year, according to market re firm Ipsos

This trend has hit fast food restaurants especially hard

McDonald’s CEO Chris Kempczinski recently hinted its customers see fast food as too expensive, even as the company has doubled down on value deals

Chipotle and Cava both missed Wall Street forecasts for the second quarter, and Wendy’s CEO Ken Cook said earlier this month the chain was “not happy with our sales performance.” Chipotle also reported a 4% same-store sales decline and 4.9% dip in quarterly traffic in July

Meanwhile, sit-down chains are getting a boost, partly because consumers see them as dering more value than regular fast food for nearly the same price

Chili’s has led the charge with a 24% jump in same-store sales in its most recent earnings report

Guest traffic at Chili’s locations also increased by 16.3% over the quarter

Its success is based partly on moves to refine its and invest more in marketing, said Kevin Hochman, the CEO of Chili’s parent company Brinker International. “We’re not the cheapest thing out there,” Hochman told The Wall Street Journal. “But because we have a total value position that works—great food, great service, and an atmosphere people enjoy—that’s why we’re winning.” Andrew Dickow, leader of the food and beverage and consumer/retail practice for investment firm Greenwich Capital Group said while people are cutting back their spending on everyday meals, they’re prioritizing experiences

For many, this means a sit-down restaurant. “Inflation has narrowed the perceived price gap between quick service and casual dining,” Dickow told Fortune. “Consumers can get substantial portions that can create ‘leftovers’ for the family, which creates real value

When fast food now feels expensive, the relative jump to casual dining seems smaller—and more justifiable.” Cheesecake Factory has also seen a boost from this trend, with its stock up 70% over the past 12 months

Meanwhile, O Garden owner Darden Restaurants’ stock is up 45% over the same period

The strong results for sit-down restaurants marks a turnaround after 2024 saw the most bankruptcies for the sector since the pandemic

Now, even Applebee’s, which has long lagged behind its fast casual peers, reported same-store sales growth in the first quarter after eight straight declines

Because non-motional pricing between traditional fast food and sit-down restaurants is converging, consumers are now leaning more toward full-service locations that can offer a more unique dining experience for the same price, according to Mark Chambers, the retail sector leader at EY. “Another key differentiator is the ability to serve alcohol, and for some adults, the option of enjoying a drink with dinner makes casual dining feel a significantly greater value when meal costs are otherwise comparable,” Chambers told Fortune

Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world

Explore this year's list.