Diners are ditching pricey fast food for casual-dining chains, CEO of Olive Garden's parent company says

Rick Cardenas, the CEO of Darden Restaurants, said Chili's and Applebee's seem to be having some success competing with fast-food chains. Jeffrey Greenberg/Education Images/Universal Images Group via Getty Images

• Darden Restaurants CEO Rick Cardenas said there's been a small shift from fast food to casual dining.
• American fast-food consumers have expressed frustration with rising prices.
• Several casual chains now offer discounted combo deals to attract diners seeking better value.

Customers fed up with increasingly high prices at fast-food restaurants are taking action, and they may be turning to places like Chili's and Applebee's instead.

Rick Cardenas, the CEO of Darden Restaurants, said as much during a quarterly earnings call on Thursday. Darden is the parent company of several casual-dining chains, including Olive Garden, LongHorn Steakhouse, and Yard House, as well as fine-dining chains Ruth's Chris Steak House and The Capital Grille, among others.

Cardenas said on the call that there's been "a little bit of a shift" from fast-food spots to competitors in the casual dining space, according to CNBC. While Darden hasn't necessarily seen that boost yet, the parent companies of Chili's and Applebee's have leaned into taking on fast food, CNBC reported.

Business Insider's Erin McDowell previously reported that casual chain restaurants like Chili's and Applebee's had instituted discounted combo deals that compete with the value meals customers are used to getting at places like McDonald's and Burger King.

Chili's even launched a Big Smasher burger in April that has just about the same ingredients as a McDonald's Big Mac.

"We know diners are experiencing sticker shock from the rising cost of fast food, with little change to the actual quantity or quality of fast food combo meals," George Felix, Chili's CMO, told Restaurant Business Magazine in a statement at the time, adding that Chili's combo meal lineup "offers better value than you'll find in any drive-thru."

Fast food prices have increased and exceptionally high rates in recent years.

An industry analyst previously told BI's Grace Dean that while fast-food prices used to rise around 2% each year, price hikes at some restaurants in 2022 and 2023 were in the double digits.

Fast-food diners told BI they were actively cutting back as the restaurants' prices have risen. Others said that if they're going to pay a certain amount anyway, they'd rather skip the drive-thru and have a sit-down meal at places like Chili's or Applebee's, even if it costs a bit more.

Fast food companies, like McDonald's, meanwhile, have introduced limited-time value meals for customers who are feeling the bite from inflation.

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