Amid an economy marked by widening divides in consumer spending, many restaurant chains are adopting a “barbell” pricing strategy to appeal simultaneously to both budget-conscious and higher-spending customers. This approach focuses on offering distinct low-cost and premium menu options, while reducing offerings in the mid-price range.

The barbell strategy, long used in the food and beverage industry but gaining new traction recently, aims to capture the diverging preferences of consumers who are either cutting back or willing to spend more. Alex Susskind, a Cornell professor specializing in food and beverage management, noted that the current economic environment, characterized by a K-shaped recovery where wealthier consumers continue spending as others retrench, has made this approach particularly relevant.

Casual dining chains such as Red Robin, Applebee’s, and Chili’s have highlighted the barbell method in recent earnings calls. Red Robin’s chief executive described pairing accessible value meals with more indulgent, premium options to cater to varied guest occasions and spending levels. Applebee’s CEO emphasized the effectiveness of combining an affordable all-you-can-eat campaign with a culturally resonant, higher-priced entrée to attract younger customers and generate social media buzz. Chili’s leadership similarly acknowledged that not all diners prioritize the lowest price, reinforcing the need for menu variety.

Data from the research firm Alphasense shows that mentions of “barbell” in corporate earnings calls within the restaurant, hotel, and leisure sectors reached a decade-high during the second quarter of the year. The term appeared 57 times in transcripts during this period, up from 37 mentions a year earlier and just 21 a decade ago, underscoring its growing prominence in industry discussions.

This pricing strategy also aligns with the spending habits of Generation Z consumers, who tend to be highly price sensitive and discerning but remain willing to spend if they perceive value. Susskind noted that this demographic’s cautious approach makes the barbell model—a menu that clearly offers both budget-friendly and premium choices—particularly well-suited.

Casual dining establishments are especially positioned to implement the strategy because their full-service format allows them flexibility to experiment across a wider pricing spectrum. Although this sector has faced challenges from inflation and changing consumer behavior, it is beginning to recover as diners grow more comfortable returning to restaurants.

Industry observers note that the barbell strategy is not a new phenomenon but rather a cyclical response common during times of economic uncertainty. “When times are tight, this pops up,” Susskind said, emphasizing that this dual-pronged approach remains a reliable tool for restaurants aiming to maintain broad appeal amid shifting consumer trends.