Over the past few years, fast food has become noticeably less affordable for many Americans as prices continue to climb in the quick-service restaurant industry.
According to a Roosevelt Institute report released last year, fast-food prices have surged by nearly 47% in the last decade.
A more recent study by LendingTree found that the average cost of a typical fast-food meal in large U.S. cities now sits at $11.56.
This steep increase in prices has shifted consumer behavior significantly. Many customers are now cutting back on eating out, especially at fast-food outlets, in an effort to save money.
Consumers Opting to Dine at Home
Data from KPMG’s Consumer Pulse Summer 2025 report reveals that 69% of U.S. consumers say they are eating at home more often instead of dining out. Among those surveyed, 85% cited saving money as the primary motivation for avoiding restaurants.
This trend has affected several major fast-food chains, including Papa Johns (PZZA), which has reported weaker consumer demand over recent quarters.
Papa Johns’ Sales Struggle Despite Small Gains
In its Q2 2025 earnings report, Papa Johns noted that comparable sales in the U.S. increased by just 1% year-over-year. Meanwhile, company-owned restaurants reported flat sales, a slight improvement from the declines seen in the previous quarter.
However, during an earnings call on August 7, executives revealed mixed results. The total number of pizzas ordered in Q2 rose by 6%, yet the average spending per order slightly decreased.
Chief Financial Officer Ravi Thanawala also shared that sales have dipped in recent weeks:
“Through the first five weeks of the third quarter, North America comparable sales are down approximately 1% as we’ve seen a more cautious consumer and softer carryout business.”
Bold Menu Changes to Attract Customers
In response to shifting consumer habits, Papa Johns has introduced several new menu items and brought back customer favorites.
In June 2025, the brand made its popular Shaq-a-Roni pizza—originally launched in 2020—a permanent menu option at $15.99 nationwide. It also unveiled a Cheddar Crust Pizza starting at $11.99, Cheddar Cheesesticks priced at $10.50, and its first-ever Croissant Pizza.
CEO Todd Penegor acknowledged the fierce competition in the pizza market, noting that the brand must win over customers with both value and quality.
Marketing Shift: Freshness as the Main Selling Point
To differentiate itself, Papa Johns launched a marketing campaign highlighting its “six simple ingredients” used in fresh, never frozen dough.
“Our customers have told us that using simple, fresh ingredients is our biggest and most important differentiator,” Penegor said. “Consumers want high-quality pizza with real ingredients, and our messaging strategy meets them where they are.”
This campaign is designed to strengthen the brand’s identity while appealing to customers who value authentic, quality food.
Investing in Technology and Customer Experience
Looking beyond menu updates, Papa Johns is focusing heavily on artificial intelligence (AI) to improve the ordering experience. The goal is to anticipate customer needs, offer personalized recommendations, and provide relevant deals based on shopping history.
The brand is also enhancing its loyalty program with exclusive offers, aiming to encourage repeat orders and build long-term customer relationships.
New Product Launches and Expansion Plans
Papa Johns isn’t slowing down on innovation. Penegor revealed plans to roll out:
- A shareable pizza format with new dipping sauces
- The Grand Papa, their largest pizza ever, currently in the testing phase
Expansion is also on the horizon, with the company aiming to open 85–115 new U.S. stores in 2025. However, it anticipates closures at the higher end of its historical average (1.5%–2%), particularly affecting small-town locations.
Sales Outlook for the Rest of 2025
Despite recent challenges, Papa Johns projects that comparable U.S. sales will be flat to up 2% by year-end. The combination of new menu items, AI-driven personalization, and marketing efforts focused on quality may help the chain regain momentum in a competitive and price-sensitive market.
The rising cost of fast food is reshaping consumer dining habits, with more Americans choosing to cook at home rather than spend on pricier quick-service meals. For Papa Johns, this shift has created challenges, but also opportunities.
By introducing innovative menu items, emphasizing fresh ingredients, and investing in technology, the pizza chain aims to win back customers and strengthen its position in a highly competitive market. The coming months will reveal whether these strategies can deliver sustained growth amid economic pressures.
Frequently Asked Questions
1. Why are fast-food prices increasing so much?
Fast-food prices have risen due to inflation, higher labor costs, and increased ingredient prices, leading to an almost 47% jump over the last decade.
2. What new items has Papa Johns added to its menu in 2025?
Papa Johns has launched Shaq-a-Roni Pizza, Cheddar Crust Pizza, Cheddar Cheesesticks, Croissant Pizza, and is testing the Grand Papa—its largest pizza ever.
3. How is Papa Johns using technology to improve customer experience?
The company is leveraging AI to personalize orders, recommend products, and send targeted offers based on customer preferences and order history.
