McDonald’s knows that its prices are driving away customers. 

To lure them back, the fast-food giant is ensuring that the cost of eight popular combo meals will remain 15% below the sum of the individual items’ prices, the Wall Street Journal reported last week. That means a $10 combo meal may now cost $8.50. 

“This is sort of an unprecedented move. I don't think we've ever seen prices cut,” said Eric Gonzalez, a restaurant analyst at KeyBanc. 

McDonald’s will also offer $5 breakfast and $8 Big Mac and McNugget combo meals later in the year, per The Journal. 

As labor and food supply costs have shot up, fast-food restaurants have hiked the cost of their burgers and fries. McDonald’s same-store sales dropped 3.6% during the first quarter of this year, its biggest decline since 2020. While same-store sales rebounded in the second quarter, McDonald’s CEO Chris Kempczinski expressed concern about losing low-income consumers. 

Some of the Golden Arches’ competitors are faring worse. Jack in the Box reported same-store sales declines of over 7% in its latest earnings report, the biggest decline in 15 years. 

Enter casual dining restaurants like Chili’s, which are thriving as families have scoured for better deals. The chain sells value meals, which include an appetizer, entree and drink, for as low as $10.99 — less than the price of a Big Mac combo meal. 

“It is unmistakable that some guests are considering, ‘Well, if I'm going to pay $11, $12, $13 per head, then why don't I go to casual dining instead with a much, much nicer environment?” said John Gordon, a restaurant analyst at Pacific Management Consulting Group. 

Here’s a look at how much prices have gone up at large restaurant chains, based on a Marketplace review of some of their Southern California locations. The price for a 2-cheeseburger combo at McDonald’s has more than doubled since pre-pandemic times at the California restaurant we looked at. Prices will vary depending on the region.

The restaurant industry faced rising labor and food costs in 2022 and 2023, which led them to hike prices, Gordon said. 

Typically, input costs and prices rise 3% year-over-year, Gordon pointed out. 

But some menu items at chains like McDonald’s and Jack in the Box have soared 28% to 100% since the pandemic began.

What’s going on with the fast casual chains? 

Fast-casual restaurants, like Chipotle and the Mediterranean chain Cava, have also faced some setbacks. 

Chipotle’s same-store sales declined 4% in the second quarter of this year, following a 0.4% decline in the first quarter. 

The restaurant chain is facing backlash for price increases and inconsistent portions. In its 2024 earnings reports, Chipotle stated that it was “focused on ensuring consistent and generous portions” after customers on social media complained about leaner burritos and bowls. 

But some customers have still vowed to stop eating there. “People don't forget those things. They really don't. So Chipotle is still in the penalty box,” Gordon said. 

Chipotle is also simply “not as cool anymore,” Gordon noted. 

“Chipotle had a long, long run. I'm not saying that Chipotle’s store model or management is broken at all, but they've just cooled off a little bit,” Gordon said. 

And Cava, which went public in 2023, recently posted worse-than-expected second-quarter sales and lowered its same-store sales growth projections for the year. Share prices stood at $84.50 two weeks ago, and have now dropped more than 20% to $66.18 a share as of Friday afternoon. 

“They're getting kind of pulled into this affordability perception issue that's plaguing some of the fast-food names,” Gonzalez said. 

The company’s stock price dipped after its earnings report failed to beat expectations. But the company’s earnings report is “not as bad as it seems” and the company’s stores are hitting their profitability targets in their first year, Gonzalez said. 

What is casual dining doing right? 

Fast casual has typically taken a bite out of casual dining’s market share, but now these more upscale restaurants are thriving. 

“I think people are rediscovering their love for these brands. I don't see that stopping anytime soon,” Gonzalez said. 

Casual dining restaurants, which had been losing market share over the years, began to recover in 2024, Gordon said. 

Same-store sales at Chili’s rose 24% in the fourth quarter thanks to a 16% increase in traffic.

“Chili’s has been on fire for over a year now,” Gordon said. 

Its mozzarella sticks haven’t hurt. The company’s “Triple Dipper,” a meal consisting of three appetizers of your choice, has gone viral on TikTok and accounted for 15% of last quarter’s sales. 

The company also runs its operations more efficiently, has acquired better equipment and has a menu that consists of a barbell pricing strategy in which they offer both low- and high-priced items, Gordon said. 

Other casual dining locales, like LongHorn Steakhouse and Olive Garden, are thriving, while chains like Applebee’s and BJ’s have improved their sales in recent months. 

Not all casual dining establishments, like IHOP and Denny’s, are doing well. (One reason may be because “breakfast is easily replaceable at home,” Gonzalez pointed out.)

But, overall, same-store sales at casual dining restaurants rose 5.1% on average in the second quarter of this year, while quick-service restaurants averaged a 1.2% decrease, Gordon said.  

After years of rising prices, consumers are exerting their bargaining power.

Correction (August 28, 2025): A previous version of this story misspelled KeyBanc.