Editor’s note: This is the latest column in a recurring series by James O’Reilly, multi-time industry CEO (Ascent Hospitality, Smokey Bones, Long John Silver’s, and former Sonic and Yum! Brands executive). O’Reilly explores industry hot topics and offers a roadmap for how operators can win over consumers in an ever-changing restaurant dynamic. The first story, on what drove traffic last year, is here.
Pricing Alone Won’t Fix Traffic—Here’s What Will
After a decade leading restaurant brands across multiple segments, including the last seven years leading full-service concepts, I’ve learned that when traffic softens, pricing is often a lever that leaders reach for. It’s understandable. But it’s also rarely the lever that actually fixes the problem.
I’ve seen this cycle repeat itself many times. Traffic slows, costs go up, and the conversation quickly turns to price. Should we discount more? Less? Sharpen our value offers? Hold steady and wait it out? Those are fair questions, but they’re not the whole story. In today’s world, price alone doesn’t change how guests behave. What brings people back, time after time, is whether the experience still feels worth it when they leave.
Traffic Has Been a Challenge for Years—But the Playbook Has Changed
Our industry is full of contradictions. It generates more than a trillion dollars in annual revenue and employs over 15 million people. Total revenue has continued to grow. And yet, traffic has been under pressure for years, particularly since the stimulus-driven surge of 2021 has faded.
That pattern held through 2025. According to Black Box Intelligence, same-store sales were modestly positive through much of the year, while traffic remained negative. In September 2025, for example, sales were up about 1.1 percent year over year even as traffic declined roughly 1.5 percent, a signal that pricing, not traffic, drove results.
The gap between sales and traffic defined much of the past year for operators. We all understand the importance of growing same-store sales, especially in a high-cost environment. But revenue growth alone doesn’t guarantee profitability or cash flow. The wave of restaurant bankruptcies in 2024—and their continuation into 2025—made that very clear. This disconnect is why the playbook is changing. Relying on price to protect sales is riskier than ever.
Why Pricing Doesn’t Change Visit Frequency—Value Does
In strong economic environments, price increases have historically been tolerated by restaurant guests. Over the past few years, that’s become far more difficult. While headline economic indicators have improved and financial markets have strengthened, many restaurant consumers, particularly in lower- and middle-income brackets, have not experienced the same relief. Coverage in outlets like The Wall Street Journal and Bloomberg throughout late 2025 consistently pointed to consumers cutting back on discretionary occasions, including restaurant visits, even as inflation cooled. In other words, stabilizing consumer prices didn’t automatically lead to more trips.
There are two important dynamics here. First, most consumers allocate a consistent proportion of their income to restaurant spending. As menu prices rise faster than disposable income, visit frequency declines to keep their spending on target. Second, consumers decide how often to dine out based on how worthwhile they believe a restaurant is, not just how affordable it is.
That’s why moderating or even lowering prices can sometimes stabilize traffic, but rarely drives sustained growth on its own. Fewer visits are as much a behavioral decision as an affordability issue.
What “Value” Actually Means to Guests
Value is not a price point. It’s a judgment guests make after the visit is over. Over time and across thousands of experiences, your brand earns a value perception that reflects how consistently you execute. Guests weigh the total experience; food quality and consistency, speed and accuracy, hospitality, cleanliness, ambience, and how easy it is to engage with your brand on- or off-premises.
The same restaurant can deliver very different levels of value on the same day, depending on how well those elements come together. When execution falls short, the price charged feels too high. When execution is consistent and confident, guests often perceive strong value even if the price is the same. That’s the gap many brands are actually dealing with today.
The Role of Discounting in an Effective Value Strategy
Discounting isn’t inherently bad. Not at all. In fact, when customer research uncovers an affordability issue (not just a value perception issue), discounting can play a role. The problem is how often discounting is used as a blunt instrument. Broad, untargeted value promotions may generate short-term traffic, but they frequently fail to improve visit frequency or profitability. Trade reporting throughout late 2025 made that clear.
The most effective value platforms share a few common traits. They are intentionally designed. They’re targeted to guests who need them, not guests who would have come anyway. They’re tested, refined, and continually re-evaluated. They become associated with the brand. And they serve as entry points, not endpoints. The question isn’t whether discounting and affordability initiatives work. It’s whether they are designed to build long-term value or chase short-term volume.
When Price and Value Work Together: An Operator’s Example
I’ve seen value strategies work when price and execution are aligned.
In one brand, we developed and tested a smaller meal at an attractive price point, below our average check. That carried risk. We knew a successful launch would bring in new and less frequent guests, which made restaurant execution even more critical. We didn’t discount existing popular items. Instead, we created new, lower-priced offerings that weren’t easily substitutable. We tested them in representative markets and evaluated guest feedback, operational impact, and financial performance before scaling.
The results surprised some people. In our test markets, traffic increased, and average check increased as well. Guests either purchased multiples of the offer or traded up to higher-priced items once they were in the restaurant. That outcome wasn’t driven by price alone. It worked because it was paired with menu simplification, improved QSC scores, teams that could execute with confidence, and better service in cleaner restaurants. These changes were already underway before value testing even started. Price opened the door. Execution determined what happened next.
Value Is the Strategy, Price Is One Lever
When traffic becomes a challenge, value perception is often the real issue, whether the cause is overinflated pricing, inconsistent execution, or both. Lowering price alone rarely fixes that. Delivering value consistently does. Price can help to bring guests back. But execution and experience determine whether the visit feels worth repeating, and the brands that are winning in today’s environment are demonstrating this. If the past year has shown us anything, it’s this: price matters, but it’s only one lever in delivering an experience guests feel good about paying for.
James O’Reilly is an award-winning CEO and board-level leader with more than 25 years of experience driving growth and transformation across public, private, and PE-backed restaurant and consumer businesses. He is a 10-year private company CEO with 15+ years of experience in restaurant and CPG marketing. He was recognized as a 2025 Georgia Titan 100 CEO. His brands have earned Newsweek America’s Favorite Restaurant Chains honors and he’s been a featured speaker at FSR’s NextGen Restaurant Summit.
