Bloomberg Surveillance · Friday, August 14, 2026
Nick Setch, of Mizuho, observes a growing divergence in restaurant sector performance, with casual dining and fast-casual establishments outperforming Quick Service Restaurants (QSRs). This trend is attributed to the economic pressure on lower-income consumers, who are disproportionately affected by rising prices and inflation.
“Well, look, the lower income demographic has been the pressure for almost two years now. That pressure is continuing? I think on top of the income or layer issues we have, you know, immigration et cetera playing into. It as well.”
“Uh, and the middle and higher income consumers have continued to spend a pace. So if anything, we've actually seen income and all strengthening, and those categories like QSR that have exposure to the lower income have been underperforming categories like casual dining, which are higher income. In fact, we've seen the divergence accelerate, you know, for example and the Court Core Court three to day July August today, the casual diners have actually seen a step up from those single dig just almost mid single digits, while the QSRs have taken a step down. So uh that that trend definitely continues.”
“Ultimately, QSR fast food has taken cumulative almost fifty percent pricing you know, since pre COVID twenty nineteen, and this year they're taking another three to five percent to cover beef inflation, labor inflation, and so on, whereas casual dining in fast casual are much more in line with grocery and not low thirty percent rangees. So we're seeing that play out as traffic share is trending towards casual dining and fast casual you know, so casual dying, Chili's, you know, cheesecake factory, BJ's, r Us rossets throw a house. That's where we see the winners today.”