How the QSR sector is setting itself up for success despite changing pressures

2025 was a difficult year for the hospitality side of the wider away from home market. Although the total market was slightly lower than our initial forecast (4.9% actual vs 5.2% forecasted), performance in the food-led sectors of the market – full service restaurants, pubs and bars, and QSR – was lower than inflation.

The QSR sector performed the best of these three, at 2.1% growth vs 2024 (although below our forecasted growth of 2.3%), an especially stark comparison to the restaurant sector which was down -4.4% year-on-year.

The QSR sector remains the most resilient part of the wider market, continuing to pivot against emerging challenges and respond quickly to the latest trends and consumer needs. Ahead of our session at the QSR Media Awards, learn more about the challenges facing the sector and how operators are responding to be in the best position for long-term success.

The challenges facing the sector

• Uncertainty and rising costs – rising labour costs and business rates, combined with lower consumer confidence are all putting pressure on operator finances. So far, operators have responded with a focus on efficiency – for example, in energy costs, tighter staffing models, reduced trading hours, automation – but there is only so far operators can go. 

• The Middle East war –  immediate worries are around rising gas and oil prices, impacting energy and transport costs. Depending on the duration of the war, lagged food-cost inflation from fertiliser and feed, and disruptions to food supply chains may pose further challenges down the line. Menus that can be engineered for volatility will help operators combat these issues if they arise, with swappable ingredients, such as proteins, sauces or sides. Forward planning for managing price increases, such as protecting core “known value” items, will help maintain value propositions.

• Changing health agenda – while this is shaping all food and drink across the UK, the diversity of the QSR market means there are different impacts and responses depending on where operators sit, or are perceived to sit, on the health spectrum. GLP-1’s are not only impacting the appetites and product choice of users, but also the overall frequency of away from home occasions. QSRs will need to adapt menus to include more smaller, lower-calorie or nutritionally-dense products, or spotlight existing products that fit these criteria in marketing to continue to appeal to changed habits and preferences.

The return of format innovation

Format diversity was a key strategy during and immediately after the pandemic, but slowly slipped back as operators’ reprioritised. Now, there is a new wave of format diversity from operators. Rather than relying on higher footfall at existing sites, brands are expanding their store networks to increase their visibility and accessibility and reaching more consumers in more places. In part this has been driven by fiercer competition for limited viable retail space from retail, particularly convenience stores and their spin-off food-to-go focused formats, such as Co-op’s On the Go format which it started launching last year.

Looking further from the high street, travel hubs, retail parts, healthcare, education and workplaces have been popular alternative spaces for operators to trial new formats and concepts, with operators adapting their menus and processes to maximise the output in a typically smaller unit. Often retailers are targeting these too – so a strong proposition suited for that location and those particular consumers is essential.

Winning in the long term

The brands that can quickly pivot to the latest trends will be the long-term winners. It’s now been six years since the sector had to become agile for survival, and this appears to be the ‘new normal’ way of operating for the foreseeable future. Trends are faster moving than ever, with many disappearing as quickly as they arrive so pivoting to deliver on these will support success. A key lesson here is that not all development has to be new: how can existing products, menus or marketing campaigns be adapted to the latest fad? This could be just making sure protein is the key call out on an existing product, extending an already-used ingredient into more dayparts, or just making sure social media teams are joining in on the latest TikTok trends to stay relevant with younger consumers.

Drinks innovation is still one of the biggest areas of development and marketing as operators look to target lower-cost occasions. The other big one is in sauces, which is starting to make its way to the UK from US chains as a lower-cost way to offer personalisation and adapt menus to keep them exciting.

Consumer confidence remains supressed so value strategies remain crucial. US operators are adopting barbell pricing, focusing on serving the extreme ends of the price spectrum to try to retain the most financially squeezed, while offering premiumisation to those who can afford it.

Longer-term, keeping ahead of AI will be crucial. Agentic AI is already being trialled with grocery retailers so it won’t be long before consumers look for the same experience away from home. It’s crucial to understand how consumers are using AI as it will shape more of consumers’ research and decision-making, so operators need to know how to show up in these searches and stay in front of consumers.

Want to know more about the future of the QSR sector?

Our QSR: the future report looks at the driving forces shaping the sector over the next five years

Join us at the QSR Media Awards 2026 to see our keynote presentation looking from the macro environment to the specific trends and operators that are shaping the next phase of QSR growth.