How Restaurants Can Increase Value Despite Inflation

Key takeaways:

• Value extends beyond price. Quality, consistency, speed and experience are always critical, but especially when facing inflation pressure.
• Menu authority drives demand. Brands with differentiated, craveable offerings are winning discretionary spend.
• Consumers are selective. Higher‑income consumers continue to spend, while others are scrutinizing relative value more closely.
• Execution underpins growth. Consistent performance strengthens expansion opportunities and M&A outcomes.

A K‑shaped consumer and industry environment

The environment for restaurant operators continues to shift quickly. Inflation has moderated from its peak, but remains structurally higher than pre‑pandemic levels, keeping pressure on food, labor, insurance, occupancy and other operating costs. In this environment, focusing on restaurant revenue growth and long-term restaurant value has become increasingly important as operators look for ways to strengthen profitability and remain competitive.

Consumers are still showing a strong interest in eating out, particularly at limited‑service, fast‑casual and experience‑driven brands. At the same time, consumer behavior has become more discerning, with spending increasingly split by income level. In many cases, higher‑income consumers are still spending and even trading up while lower-income consumers pull back.

Another factor restaurants need to watch closely is the relationship between grocery prices and menu prices. As of 2025, average restaurant menu prices have increased roughly 31 percent since February 2020, while grocery prices increased about 25 percent over the same period. This brings the relative value equation back into sharper focus for consumers.

Increase restaurant value beyond price

To win in this increasingly complex and competitive environment, restaurant operators will need to find ways to attract consumers beyond deals and discounts.

“One thing we continue to see is that value is perception, not just price,” said Jeff Poe, managing director and head of restaurant and franchise with Fifth Third Corporate and Investment Banking. “Consumers are willing to pay for indulgence, quality ingredients, speed, accuracy and experience when it’s executed consistently.”

Many of today’s strongest performers are brands that deliver a compelling value experience for the money. Companies such as Taco Bell, 7 Brew, Culver’s and Jersey Mike’s share common traits that support growth, strengthen profitability and contribute to higher restaurant valuation:

• Clear menu authority
• Speed and execution
• Consistent experience
• Strong culture and brand ethos
• Ongoing menu innovation supported by digital and social engagement

For beverage‑led brands like 7Brew, the combination of price, drive‑through speed, customizable menu and an energic friendly experience has been especially effective.

What this means for M&A

For operators and brands considering growth, the takeaway is clear: driving consumer traffic comes first. As restaurant operating costs continue to rise, businesses that deliver value to consumers in a disciplined, differentiated way are often better positioned to protect margins, strengthen financial performance and attract M&A interest.

“When strong operations, smart growth strategies and the right capital come together, that’s when we see the best outcomes,” said Charles Hurt, managing director and head of consumer M&A with Fifth Third Corporate and Investment Banking. “We spend a lot of time with operators and investors, so we understand how today’s market dynamics are shaping tomorrow’s opportunities.”

Moving forward for growth

Inflation continues to challenge the restaurant industry. Operators that establish menu authority, deliver compelling value without over‑relying on discounts and stay disciplined on execution are better positioned to grow and to remain attractive in an active M&A market.

“Our job is to help operators understand what’s possible and then structure the right capital solution to support it,” said Poe. “Fifth Third’s restaurant and franchise team works closely with clients across the capital structure, because knowing the industry matters when conditions get tighter.”

Fifth Third Bank’s restaurant and franchise industry specialists understand your business challenges and provide experience in the areas of credit, debt capital markets, investment banking, commercial payments and currency processing solutions to help you achieve your operational and strategic financing objectives.

For all restaurant and franchise banking needs, contact Jeff Poe at 312-517-3256. Learn more about our Consumer & Retail Banking services.