The burger wars have always been fiercely fought, but the battle is even more challenging this year due to inflation and job losses. Prices are surging, and consumers are becoming increasingly cautious with their spending, particularly when it comes to dining out.
Fast food restaurants, known in the industry as quick-service restaurants (QSRs), have borne much of the brunt of the spending pullback. And burger chains have been particularly hard hit, including Wendy’s, which has seen its U.S. foot traffic nosedive as consumers rethink their budgets.
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Year Founded: 1969 (Columbus, Ohio).
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Locations (worldwide): 7,334, including ~6,000 in the U.S.
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Employees: ~225,000
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System-wide sales (2024): $14.5 billion, up 3.1% year over year.
Wendy’s has never been viewed as the low-cost fast food option. Its decision to focus on quality, despite higher prices, was a deliberate choice that helped it carve out business from rivals McDonald’s and Burger King. However, that niche is now working against it as it gets squeezed by casual dining restaurants, particularly Chili’s, which are cutting prices to boost traffic and attract cost-conscious consumers — eroding Wendy’s moat.
It doesn’t help matters that restaurants are facing heavy price increases.
“82% of those experiencing labor increases saw a 1% to 5% increase, while 15% experienced a 6% to 14% jump,” reports Pizzamarketplace.com, citing Restaurant365’s Midyear State of the Restaurant Industry. “Food cost increases also surpassed expectations, with 91% of respondents reporting a rise, up from the 82% who had expected increases at the start of the year. More than half of those coping with food cost inflation this year are seeing a 1% to 5% increase.
As a result, Wendy’s sales are under pressure, and that’s forcing it to make some tough decisions, including closing many of its locations in 2026.
Chili’s decision to cut prices on its burgers to attract more customers has blurred the lines between casual dining and fast food. Chili’s “3 for me” deal even goes as far as to challenge McDonald’s head-on in its marketing, saying on its website, “With two slices of American cheese, ketchup, mustard, pickles, sliced onions and 85% more beef than a Quarter Pounder with Cheese*. The Big QP really does make other burgers look tiny.”
The 3 for me deal gives customers an appetizer, beverage, and entree for as little as $10.99 — a price that puts it within the ballpark of Wendy’s Dave’s Combo, which clocks in around $12 near me.
