The K-shaped economy.
You’re not imagining it. Some guests are ordering apps, mains, cocktails, and dessert––the whole nine yards. Others are splitting entrées, skipping drinks, or only showing up only for deals.
That’s the K-shaped economy at work. Instead of bouncing back together, right now the economy is split in two:
💰 One side has the big bucks (and isn’t afraid to spend it).
✂️ The other side is cutting back… hard.
But how can restaurants adapt to better serve these two groups?
David Mann (from Restaurant 101 Substack) puts it this way: “This creates two distinct markets. Restaurants serving higher-income demographics will see stable or growing traffic in 2026. Restaurants relying on lower-income consumers will face continued pressure. The brands that succeed across both segments deliver value, not discounts.”
But what does value even mean? “Value isn’t about discounting. Value is about giving consumers a reason to choose your restaurant. For higher-income consumers, value means experience and quality. For lower-income consumers, value means price and portion size. For middle-income consumers, value means all of it.”
Take McDonald’s and Cava, for example—two brands that felt the effects of the K-shaped economy as lower-income and younger diners pulled back last year. But they took very different approaches to tackling the issue. McDonald’s continued to push the affordability factor: snack Wraps plus the return of Extra Value Meals. Cava doubled down on the we-are-not-fast-food angle, pushing fresh ingredients and premium protein as key selling points.
“The restaurants that win in 2026 will know which segment they serve and deliver what that segment wants. The restaurants that try to be everything to everyone will keep losing market share to focused operators.”
