Restaurant Chains Bet on Better Food to Win Back Cautious Diners

Restaurant chains are turning their attention back to the food itself. Juicier chicken tenders, revamped sauces and richer, creamier Frosties lead a wave of menu upgrades, as executives hope that better quality will win back diners.

Over the last two years, consumers have dined out less frequently and grown pickier about where they eat, according to data from Black Box Intelligence. During that stretch, value became the buzzword of choice for restaurant executives. They explained to analysts and investors that the word covers more than menu pricing alone.

Now, industry CEOs are turning to their corporate chefs to beat rivals on quality and taste as they broaden their definition of value. Discounts and one-off promotions can lift traffic for a time, but the actual product still matters for a restaurant’s long-term growth and for franchisee profitability.

Chains Tout Menu Upgrades on Earnings Calls

From Wendy’s to Chipotle Mexican Grill, chief executives highlighted new or upcoming improvements to menu items on their quarterly earnings conference calls in recent weeks. The message across the industry is consistent: better food belongs at the center of the value conversation.

“We think the product’s improved and even better,” Chipotle CEO Scott Boatwright told analysts on the company’s call in late October, referring to the burrito chain’s brisket, which returned to menus for a limited time Thursday.

Wendy’s Builds Its Turnaround Playbook Around Food

For some chains, better food is a key step in an ambitious turnaround plan. Wendy’s unveiled a five-part turnaround strategy on Thursday, and one of its pillars pairs quality food with real value.

“We’re also rebuilding our food offerings and have begun testing improvements to quality and craveability of our core items, including thicker, crispier bacon, a richer and creamier Frosty, whole leaf lettuce on sandwiches and improved salads,” Wendy’s CEO Bob Wright told analysts on the call Thursday.

That same day, the company reported its seventh straight quarter of same-store sales declines. Wendy’s also publicly rejected a $1.4 billion takeover bid led by Nelson Peltz’s Trian Partners. The chain said the proposal did not take into account the potential value that its turnaround plan could unlock.

The Domino’s Precedent

History offers evidence that better-tasting food can contribute to higher sales. In 2009, Domino’s Pizza changed its recipe, swapping out its sauce, adding garlic to its crust and switching to shredded mozzarella with a hint of provolone.

The company paired those changes with blunt commercials that compared its previous crust to cardboard and its old sauce to ketchup. Together, the recipe overhaul and the candid advertising helped spur U.S. same-store sales growth. Today’s restaurant executives hope their own menu upgrades can deliver a similar lift.