The insight: The fast-food value war is doing little to change consumers’ perception that fast food is a luxury, according to a survey by Morning Consult.

• The net value for quick-service restaurants (QSRs) stood at 44.9 percentage points as of July 2024, roughly in line with where it was at the start of the year.
• Despite the proliferation of meal deals, the number of customers who said they were likely to purchase fast food rose by less than one percentage point in July.

The big picture: While meal deals from McDonald’s, Chili’s, Starbucks, and other QSRs are boosting restaurant traffic, according to data from Placer.ai, years of price hikes have taken their toll on consumers, who increasingly see fast food as an occasional indulgence rather than an everyday occurrence.

• Nearly two-thirds (62%) of Americans report eating fast food less often due to higher prices, while 78% now consider fast food a luxury due to its expense, according to a LendingTree survey.
• With the price gap between fast food and fast casual narrowing, more consumers are opting for the latter due to perceptions of higher quality, better taste, and healthier options.
• That’s one reason why fast casual chains like Cava and Chipotle are significantly outperforming their fast-food competitors, despite higher prices. The former is “seeing trade up” from fast food, Cava CEO Brett Schulman told Axios, as well as “trade down from full service and trading over from legacy fast casual” thanks to a strong value proposition.

Our take: It’s still early days for fast-food chains’ value meal efforts. But McDonald’s decision to extend the availability of its meal deal shows that it will take more than a few months of steep discounts to restore QSRs’ reputations for value—particularly among inflation-hit lower-income consumers, who are pulling back most strongly.