Fast Food Isn’t Disappearing, But “Cheap” Is

Summary

As fast-food prices climb, the industry’s core value-seeking customer is cutting back, turning “convenience” into a tougher sell. High beef costs intensify the squeeze for burger-forward chains. McDonald’s is bucking the trend by leveraging scale, value bundles, and consistent execution. The category’s future likely includes more closures, more discount-driven demand, and increasing consolidation.

Key takeaways:
• Value is no longer assumed; traffic depends on clear, compelling deals.
• Beef inflation pressures margins and accelerates menu/protein shifts.
• Scale and operational consistency are separating winners from losers.

Fast food built its modern dominance on a simple promise: when you want a quick, convenient, affordable meal, fast food is the answer. However, this appeal has weakened. As chains raise prices to cover labor and ingredient costs, lower-income diners are visiting less often, and they’re noticing when “value” no longer feels like value.¹

This situation presents a challenge for brands that rely on frequent customer visits. When core customers face financial constraints, their purchasing habits often shift from habitual loyalty to prioritizing promotions, choosing to visit only when special offers are available. In 2026, consumer research consistently identifies cost consciousness as a key influence on restaurant selection, requiring operators to demonstrate value and affordability in their everyday offerings, not solely through advertising. ⁷

Is beef the last straw?

Beef is becoming the sector’s pressure test. Barron’s notes that U.S. cattle herds have shrunk to a multi-decade low, keeping beef prices elevated and limiting near-term relief.²

According to Barron’s:

Restaurants aren’t to blame for costly beef. Screwworm is, to a point. These parasitic fly larvae burrow like corkscrews into warm-blooded animals and feed on living flesh. An outbreak in Mexico has halted cattle imports—typically 4% to 5% of U.S. supply.

Drought in recent years has made raising beef costly, forcing farmers to buy feed rather than use open grasslands, with feed prices also having increased by drought.

USDA’s annual inventory report put U.S. cattle and calves at 86.2 million head as of January 1, 2026, reinforcing the idea that higher beef costs may stick around.⁵

Some chains can pivot at the margins, offering more chicken, pork, eggs, or plant-based limited-time offers, but burger-forward brands don’t have an option. They can’t fully rewire the menu without risking brand identity, and customers quickly detect “value” that arrives via smaller portions or stealthy add-on pricing.

How McDonald’s stayed on offense

McDonald’s has shown strong resilience throughout this cycle, relying on its scale, consistent operations, and effective marketing to increase customer visits and spending. In its fourth quarter of 2025, the company reported global comparable sales up 5.7% and U.S. comps up 6.8%, attributing momentum to value platforms and promotions that brought budget-focused customers back.³

Critically, McDonald’s can subsidize sharp deals without sabotaging unit economics because it has purchasing leverage, a massive digital ecosystem, and a playbook refined across markets. In a world where “cheap” is no longer automatic, the strongest brands are the ones that can deliver reliable speed and price clarity, at scale.

Closures now, consolidation next

Store closures are the near-term symptom of that squeeze. Wendy’s, for example, said it plans to shutter roughly 298 to 358 U.S. locations in early 2026 as it refocuses on everyday value and prunes weaker boxes.⁴

The likely next phase is consolidation, both at the brand level and among franchise operators. Industry deal trackers point to rising restaurant M&A activity and continued portfolio reshuffling as operators chase scale, efficiency, and stronger unit economics.⁶⁸

What “cheap to-go” looks like from here

Expect the category to split into two clearer lanes:

• True value players that can sustainably price below the “I should’ve bought groceries” threshold, without sacrificing speed or consistency.
• Convenience-and-craving brands that accept fewer visits but compete with product quality, beverages, and digital ordering to hold margin.

The middle will keep getting hollowed out: prices drifting up, differentiation drifting down. For operators, the practical lesson is simple; every point of margin matters, and uptime matters more. If the customer is choosing deals over loyalty, then execution (and the systems behind it) becomes a frontline competitive advantage.

 

1. Financial Post (Financial Times syndication), “What fast food’s downturn says about the US economy” (Feb. 2026) , financialpost.com
2. Barron’s, “America’s Cattle Crisis: a Shrinking Herd, Soaring Beef Prices, and Little Relief in Sight” (Feb. 2026) , barrons.com
3. AP News, “McDonald’s says focus on value is bringing back customers” (Feb. 2026) , apnews.com
4. AP News, “Wendy’s closes US restaurants and focuses on value to turn around falling sales” (Feb. 2026) , apnews.com
5. USDA NASS, “Cattle” (Cattle Inventory report, Jan. 30, 2026, PDF) , usda.gov
6. Restaurant Dive, “Restaurant Mergers & Acquisitions” (coverage; accessed Feb. 2026) , restaurantdive.com
7. McKinsey, “What US consumers want from restaurants in 2026” (Jan. 2026) , mckinsey.com
8. Capstone Partners, “Restaurants M&A Coverage Report” (June 2025, PDF) , capstonepartners.com