Review of the Week: McDonald's Introduces New Burger, Luckin's Enters U.S. Market, Olo Becomes Private, and More News Highlights
In the rapidly evolving landscape of the U.S. fast food industry, competition is fierce as major players and emerging brands battle it out for market share. Heather Lalley, Managing Editor of Restaurant Business, Foodservice Director, and CSP Daily news, provides an insightful analysis of the current market trends.
The U.S. fast food market, valued at approximately $148.1 billion in 2024, is projected to grow to around $216 billion by 2034, with a Compound Annual Growth Rate (CAGR) of 3.85% from 2025 to 2034. The broader U.S. fast food and quick-service restaurant (QSR) market is expected to rise from $311.54 billion in 2024 to $330.56 billion in 2025, reflecting increasing consumer demand and spending habits.
McDonald's continues to dominate the market, alongside Burger King and Wendy's, leveraging significant investments in technology, delivery, and menu innovation to maintain its leadership position. Starbucks and newer coffee chains like Luckin Coffee, Dutch Bros, and 7 Brew compete fiercely in the fast-growing coffee and beverage segment. Starbucks benefits from strong brand loyalty and extensive locations but faces rising competition from agile newcomers focusing on convenience and innovation.
Taco Bell, Whataburger, and similar fast-casual brands vie for market share by differentiating with menu innovation, regional appeal, and expanded digital ordering systems. Regional players like Swig, known for customizable drinks, compete more locally but benefit from consumer trends favoring personalized and novel beverage options.
Technological innovation is a significant competitive factor, with approximately 68% of fast food chains adopting labor-saving technologies like AI and robotics to reduce costs by up to 50% and enhance service speed. Automated kitchen systems and AI-powered order processing, such as those recently introduced by BurgerBots and ABB Robotics, are transforming operational efficiency, benefiting chains with strong tech investment like McDonald’s.
Delivery and digital ordering platforms are crucial, with online orders increasing average check sizes by 26%, intensifying competition to capture digital customers. Many chains are streamlining their menus by 20–30% to speed up service and improve food quality, responding to consumer demand for quicker and higher-quality experiences. Drive-thru sales remain vital, accounting for about 43% of fast food sales, favoring chains with well-optimized drive-thru operations like McDonald’s and Taco Bell.
In other fast food news, McDonald's has introduced a new burger called the Daily Double to its value lineup, aiming to reverse slumping sales. Meanwhile, the restaurant tech supplier Olo has been sold to the investment firm Thoma Bravo for $2 billion, taking Olo private, just four years after it went public. With no further details disclosed, this sale marks a significant shift in the fast food technology landscape.
The fast-food beverage wars have started, with chains like Taco Bell, Whataburger, and McDonald's introducing novel drinks. Up-and-coming drink slingers like Swig are also competing in the beverage market, catering to the preferences of Gen Z consumers who are shown to prefer fancy, non-alcoholic drinks and are willing to pay a premium for them.
Luckin Coffee, a Chinese coffee chain with more than 24,000 coffee shops, has opened its first two U.S. locations in New York City. Waffle House has lifted its 50-cent per egg surcharge due to falling egg prices, while Denny's has ended its egg surcharge at the locations where it was previously implemented, although egg prices remain higher than a year ago.
As the fast food market continues to grow and evolve, it will be interesting to see how these trends and developments shape the competitive landscape in the coming years.
The financial growth of the U.S. fast food market is expected to reach $216 billion by 2034, with a significant focus on technological innovation and digital ordering platforms to cater to changing consumer lifestyles and preferences. Businesses in this sector are investing in labor-saving technologies, AI, and robotics to improve operational efficiency and service speed, while also focusing on menu innovation to stay competitive. This trend is particularly visible in the fast-food beverage market, with brands introducing novel drinks to appeal to Gen Z consumers who are willing to pay a premium for fancy, non-alcoholic beverages.
