From Domino's Pizza to Applebee's, restaurant chains across the country reported softer sales in March as gas prices climbed past $4.50 a gallon, forcing budget-conscious Americans to cut back on eating out. The damage, though, was far from uniform. A handful of chains with strong value plays or loyal customer bases managed to grow same-store sales even as the broader industry lost traffic.
The pattern is familiar and frustrating. When fuel costs spike, the Americans who can least afford it, the ones already stretching every paycheck, are the first to change their habits. They skip the drive to Applebee's. They order fewer appetizers at Chili's. They cook at home instead of calling Domino's. The restaurant industry, which depends on discretionary spending from exactly these consumers, absorbs the hit.
Traffic across the restaurant industry fell 2.3 percent in March compared with the same period a year earlier, CNBC reported, citing data from Black Box Intelligence. A separate Numerator survey of drivers found that 43 percent of respondents had cut back on dining out and takeout since gas prices started climbing. That is not a marginal shift. Nearly half the people behind the wheel are rethinking whether a meal out is worth the trip.
John Peyton, CEO of Applebee's and IHOP parent Dine Brands, told CNBC the damage was concentrated among the chain's most price-sensitive customers:
"March and April were softer than January and February, particularly with this value-oriented consumer that we saw staying home more often or dining at lower-cost alternatives, and we attribute that to gas prices specifically and the economy more generally."
Peyton put a fine point on the threshold. "We know that when gas prices start to go past $3.50, that affects that guest for us," he said. The national average has blown well past that mark. AAA data cited in reporting showed the average price exceeding $4.50 a gallon, up 44 percent from a year earlier, AP News reported. Photo captions from Monterey Park, California, showed prices above $6 a gallon at Chevron and Shell stations on April 30.
Applebee's response was blunt and immediate: a new All-You-Can-Eat promotion launching Monday, offering shrimp, boneless wings, riblets, and fries for $15.99. It is the kind of aggressive value play that signals a chain knows its core customer is hurting. Gas prices at these levels do not just eat into commuting budgets, they reshape how families decide where and whether to eat.
McDonald's posted same-store sales growth of 3.7 percent in the first quarter, a solid number propped up by what executives described as a barbell strategy, pairing value offerings with full-priced promotions. But CEO Chris Kempczinski was candid about what lies ahead.
On the company's earnings call, Kempczinski said:
"Clearly, when you have elevated gas prices, which is the core issue that I think we're all seeing about in the press right now, gas prices, inflation on that, that is going to disproportionately impact low-income consumers. And so we expect the pressures there are going to continue."
That warning matters. McDonald's is the bellwether for American fast food. When its CEO says low-income traffic is under pressure and expects it to persist, the rest of the industry should listen. AP News reported that fast-food visits by households earning $45,000 or less are still declining overall, a trend that predates the latest gas-price spike but is now being reinforced by it.
The squeeze on consumer spending during this gas-price surge is not happening in isolation. Americans are already carrying elevated debt loads, and every dollar that goes into the gas tank is a dollar that does not go into a drive-through window.
Not every chain is losing ground. That is the more interesting part of the picture, and the part that reveals how much execution matters even in a tough environment.
Burger King, owned by Restaurant Brands International, posted domestic same-store sales growth of 5.8 percent during the quarter, outpacing both McDonald's and Wendy's. RBI CEO Josh Kobza offered a clear-eyed read of the landscape:
"Overall, when you look at the first quarter, there wasn't any kind of sequential deceleration in the total [quick-service restaurant] performance. What I think is the most interesting is the dispersion in outcomes. You have some concepts that are doing really well, and you have some concepts that are struggling."
Kobza added that his company's results were "much more impacted by the places where we're doing a really great job" than by macro factors. That is the kind of confidence a CEO earns by delivering numbers, not excuses.
Kevin Hochman, CEO of Chili's parent Brinker International, told interviewers his chain's market share had accelerated, which, as he noted, "obviously means then the casual-dining industry is shrinking or slowing down." He traced the softening to geopolitical events and the gas prices that followed. But Hochman was blunt about what comes next: "I think the strong players are going to get stronger."
Even at Chili's, though, the strain showed at the margins. Hochman said that for several days in late April, customers traded down, buying fewer alcoholic drinks, skipping appetizers and desserts. That kind of behavior is a leading indicator. When diners still show up but spend less per visit, the industry's revenue problems are deeper than a simple traffic count reveals.
Chipotle reported surprise same-store sales growth for the first quarter, though CFO Adam Rymer acknowledged on the company's late April earnings call that "in March, there was a little bit of softening in our trends right around the time where the Iran conflict began." He added that sales had since accelerated. Chipotle's strategy of betting on premium menu items while wallets tighten is a calculated gamble, one that appears to be paying off for now.
Shake Shack CEO Rob Lynch struck a similar note on Thursday's earnings call. "We did see a little bit of softening in the back half of March, but not at a significant rate," he said, describing the burger chain's first-quarter sales as "relatively consistent."
Bloomin' Brands, Wendy's, and Sweetgreen all reported that sales actually improved sequentially in March compared with earlier in the quarter, though that improvement was attributed largely to a reprieve from winter storms rather than any surge in consumer confidence.
The distinction matters. A weather bounce is not a demand recovery. And when restaurant chains are already shedding locations at an accelerating pace, a one-month reprieve from bad weather does not change the underlying math.
The restaurant industry's March stumble is a symptom, not the disease. The disease is an energy environment that punishes working-class consumers first and hardest. When the average national gas price sits above $4.50, and above $6 in parts of California, every household budget gets rewritten. Dining out is one of the first discretionary expenses to go.
Forty-three percent of drivers told Numerator they had already cut back. That number will climb if prices stay elevated or rise further. And the executives who run these chains know it. Kempczinski expects the pressure to continue. Peyton is rolling out $15.99 all-you-can-eat deals to keep his customers walking through the door. Hochman is watching his guests skip the appetizer.
The chains that entered this period with strong brands, disciplined value strategies, and loyal customers, Burger King, Chipotle, Chili's, are gaining share. The ones that depend most heavily on price-sensitive, gas-dependent consumers are losing it. That divergence will only widen if fuel costs remain at these levels through the summer driving season.
Energy policy has consequences that reach far beyond the gas pump. When Americans cannot afford to fill the tank, they cannot afford to fill the booth, either. The restaurant industry is learning that lesson one empty table at a time.