When athleisure brand Vuori launched in 2015, it was headquartered in a garage, sold only men’s shorts and couldn’t get investors to give it the time of day. 

Now, the Carlsbad, California, retailer is expanding globally, backed by a string of marquee investors including General Atlantic, SoftBank and Norwest Venture Partners, after raising $825 million in November in a funding round that valued the company at $5.5 billion.  

It’s become the envy of incumbents such as Lululemon, Gap’s Athleta and Levi’s Beyond Yoga, and it’s poised to be one of the retail industry’s biggest IPOs when it eventually files to go public, which people close to the company say it plans to do.

“It’s a notable deal for the category it’s in … you haven’t seen many deals in that market at all over the last couple of years, and the deals that have happened have been more, I’d say, challenged, or more at value-oriented situations,” Matthew Tingler, a managing director in Baird’s global consumer and retail investment banking group, said of the recent funding round.

“Vuori’s bringing a lot of excitement and growth to the market,” added Tingler, an expert in the athletic apparel space who wasn’t involved in the transaction. “In ways, they’ve been taking share in that athleisure market broadly … they’re challenging the legacy players of Athleta and Lululemon.” 

As Vuori went from a no-name brand to one of the most highly valued private apparel retailers on the planet, it saw robust sales growth and consistent profitability, winning over consumers in a crowded space with its coastal California take on athleisure.

“Vuori competes on a differentiated product, a differentiated brand, a differentiated store experience, differentiated materials,” Vuori CEO and founder Joe Kudla told CNBC in an interview. “If you were to just survey our customer base [and ask], ‘Why is Vuori so special?’ They would tell you it’s because of our product, it’s because of the comfort, the textile, the fabrics we work with, and the fit. We are all about product, product, product, and that’s ultimately what results in great performance in our industry.” 

Despite its success, Vuori faces challenges ahead. The company operates in a crowded athleisure space that analysts aren’t sure will grow as quickly as it has in the past. Some see it as one of the fastest-growing apparel categories, while others expect it to slow as consumers look to dress up after years of dressing down.

Customers also seem to be worrying about whether Vuori’s products will stay the same as it scales and faces the demands of being a publicly traded company.

“If you go look at message boards right now, the thing that consumers of Vuori are most concerned about is, is the quality of the fabric going to fall?” said Liston Pitman, a strategy director with Eatbigfish and an expert in challenger brands. “Are they going to water down the brand that I love as an exchange for growth?”

Plus, Vuori faces the same issues as other consumer discretionary companies. Retailers have been forced to work harder to win customer dollars, and demand has been unsteady as consumers think twice before buying things that may be wants rather than needs.

Since it is still private, not much is known about Vuori’s financial performance. But analysts estimate that it generates around $1 billion in annual revenue, and the company says it has been profitable since 2017. 

While its sales are a fraction of the $431 billion global athleisure market, Vuori has seen steady growth and has outperformed the overall sportswear market at least since 2020, according to data from Euromonitor and sales estimates from Earnest. As of the end of October, Vuori has grown sales by 23% so far this year at a time when the overall sportswear market is expected to grow by 4.3%. Last year, it grew 44% while the sportswear market expanded by only 2.4%. 

Retail analyst Randy Konik, a managing director with Jefferies, said Vuori and fellow upstart Alo Yoga have been so successful in part because they’re taking share from Lululemon, which he said has alienated its primary customer base as it has expanded into new categories. 

“Five years ago, Alo and Vuori were … nothing burgers, and that’s when Lululemon was growing 20% a year, whatever it is, or more. Today, you look at the numbers and you’re like, wait a second, the business is flat,” said Konik, referring to Lululemon’s largest market, the Americas. “It’s not growing, and yet it’s coinciding with the hypergrowth of Alo and Vuori. So … in my opinion, the data proves that that is a market share issue.”

Analytics firm GlobalData found that Lululemon’s customers are now spending more at Vuori than they did previously. In 2018, 1.2% of Lululemon’s customers shopped at Vuori, but that number grew to 7.8% as of the end of November.

Last week, the longtime category leader gave a cautious outlook for the all-important holiday shopping season as it contends with slowing growth and product missteps. It wasn’t asked about the competitive threats it’s facing but acknowledged that its core customer is slowing down. 

Vuori’s valuation and interest from private equity come as investors flee the consumer sector. Its success has left some industry observers scratching their heads and wondering: How can a leggings and joggers company be worth this much, in this economy? Analysts say it comes down to Vuori’s business model, its ability to grow profitably and its product assortment, which has resonated with shoppers.

Kudla said the company was laser focused on growing profitably from the beginning because it really didn’t have another choice. Unlike other direct-to-consumer brands that were raising piles of cash at the time, investors weren’t interested in the mens-only brand that Kudla was pitching.

So he was forced to bootstrap the company using funding from family and friends. 

“We developed a working capital model that would self-fund the business, and so we were built very counter to the trend of the time, and that resulted in a really great business with a lot of discipline,” said Kudla, who was a CPA for Ernst & Young before he got into fashion. “I managed the entire business through this complicated spreadsheet, so every decision that I made, I could forecast the cash-flow impact six months from today.” 

To save money, Kudla didn’t pay himself for two years, ran the business out of a garage and hired employees who were willing to trade equity for compensation. Perhaps most importantly, he developed partnerships with his suppliers, which alleviated the cash-intensive burden of acquiring inventory and paying for it up front. 

“I started treating our suppliers like they were investors in the business, and really helping them see the vision for what we were building,” said Kudla. “I was able to convince our early factory partners to give us really great terms so that I could receive the inventory, sell it, collect cash from my wholesale partners, or sell it direct to consumer and then pay for the inventory, and that strategy ultimately led me to building a working capital model that self-funded our growth.” 

While Vuori started out as a purely online business, Kudla wasn’t precious about partnering with wholesalers at a time when many founders in the direct-to-consumer space were against the idea. By getting his products on the shelves at REI in the brand’s early days, he was able to build awareness and acquire customers in a way that didn’t drain Vuori’s balance sheet. 

“We got profitable in 2017, we started generating free cash flow … there was no institutional capital involved in our business, no venture money involved in our business, until 2019, when we were already very profitable and on a pretty strong growth trajectory,” said Kudla. 

Years later, Kudla’s approach almost feels prescient. Many of the DTC peers that Vuori came up with are now teetering on the edge of bankruptcy, unable to make the unit economics of their business work. Investors no longer have patience for companies that have no path to profitability.

Now, most brands and retailers recognize that selling only online often doesn’t work. It has proven critical to partner with wholesalers and open up stores, alongside building direct channels online.

“I like how [Vuori is] going about growth,” said Jessica Ramirez, senior research analyst at Jane Hali & Associates. “With REI, it was one of their top accounts, and I feel like it was a different way of going into wholesale, but very targeted wholesale, so knowing that that is a customer that would be purchasing a particular kind of activewear.”

Vuori’s investment from General Atlantic and Stripes in November is further evidence of a robust balance sheet. The deal was structured as a secondary tender offer, which allowed early investors to sell their shares and cash in. None of it went to the balance sheet, and Vuori didn’t need new funding for its aggressive growth plans, which include expanding into Europe and Asia and having 100 stores by 2026, said Kudla. 

“We’re going to continue growing the business the same way we’ve always grown the business, which is very calculated with a lot of discipline,” he said. 

In many ways, the brands jostling for share in the crowded athleisure space can blur together. They all sell leggings, they all sell sports bras, and they’re all looking to win over consumers with their unique blend of comfort, style and performance. The same can be said for the broader apparel industry, which is why having products that stand out separates the industry’s winners and losers.

Fans of Vuori say the brand’s quality, fit, fabric and comfort are what sets it apart from competitors and keeps them coming back. Meanwhile, product missteps at Lululemon have been blamed for a sales slowdown in its largest region, the Americas. 

In the three months ended April 28, Lululemon’s comparable sales in the Americas were flat after the company failed to offer the right color assortment in leggings and the sizes that customers desired. 

In early July, Lululemon launched its new Breezethrough leggings, designed for hot yoga classes, but ended up yanking them from the shelves after it received complaints about the product’s unflattering fit. Its lack of desirable new products is also limiting how much Lululemon’s core customer is spending with the brand, the company said when reporting fiscal third-quarter earnings Dec. 5. The company said it expects its assortment to be back in line with historical levels in 2025, which Truist anticipates will be the “key driver” for better U.S. sales, especially as it laps easier comparisons from the year-ago period. 

“It seems that they’ve snoozed on where the customer is going … you have to remember that today’s consumer isn’t necessarily a loyal consumer,” said Ramirez.

“Fabric does matter, movement matters … if someone you know mentions there’s another brand that, ‘Oh, you know it held me in better, or I was able to run quicker, I didn’t sweat as much, I didn’t feel as gross,’ these very, like, small things that do matter in your performance, people will give them a try.”

— Additional reporting by Natalie Rice

Walmart has started giving store-level associates body cameras to wear as part of a pilot program at some of its U.S. locations, CNBC has learned. 

It’s not clear how many of Walmart’s stores have the recording devices, but some locations now have signs at entry points warning shoppers that it has “body-worn cameras in-use,” according to witnesses and photos posted online. 

In at least one store in Denton, Texas — about 40 miles north of Dallas — an associate checking receipts was seen wearing a yellow-and-black body camera earlier this month, according to a shopper who shared a photo with CNBC. 

“While we don’t talk about the specifics of our security measures, we are always looking at new and innovative technology used across the retail industry,” a Walmart spokesperson told CNBC. “This is a pilot we are testing in one market, and we will evaluate the results before making any longer-term decisions.”

Walmart, the largest nongovernmental employer in the U.S., is testing the technology after smaller retailers started trying body cameras at their own stores as a way to deter theft. Body cameras and the footage they gather are commonly advertised as a way to prevent shoplifting, but Walmart intends to use the tech for worker safety — not as a loss prevention tool, according to a person familiar with the program.

In a document titled “Providing great customer service while creating a safer environment,” staff are instructed on how to use the devices, according to a photo of the document posted on an online forum for Walmart employees and customers. It instructs employees to “record an event if an interaction with a customer is escalating” and to not wear the devices in employee break areas and bathrooms. After an incident occurs, staffers are told, they are to discuss it with another team member, who can help them log the event in the “ethics and compliance app,” according to the document. 

The body cameras at Walmart come during the thick of the holiday shopping season, when retail employees work long hours and face tough interactions with customers that can be more tense and hostile than usual. 

“There’s too much harassment that goes on throughout the year, but especially during the holiday season … it’s even worse,” said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union. “Everyone is stressed out. If they can’t find the item they’re looking for, they get upset and whom do they blame? They blame the shop worker.” 

However, it’s unclear whether body cameras actually help to deescalate conflict. Appelbaum, whose union does not represent Walmart employees but includes staff from retailers such as Macy’s and H&M, said the RWDSU is concerned that body cameras are more about surveillance and deterring theft than making employees safer.  

“Workers need training on deescalation. Workers need training on what to do during a hostile situation at work. The body camera doesn’t do that. The body camera doesn’t intervene,” said Appelbaum. “We need safe staffing and we need panic buttons.” 

Bianca Agustin, the co-executive director of United for Respect, a workers organization for Walmart and Amazon staffers, said the group has asked Walmart to provide more training for its employees but that the company hasn’t met those demands. She said body cameras could be part of the solution but cameras alone are “no substitute” for proper training.

“There’s a claim that the body cams are going to promote deescalation just organically. We don’t think that’s true,” said Agustin. “You see a lot of violence against workers already at the self-checkout kiosks when they even are attempting to [deter theft] … there’s a potential that this might hurt that [deterrence] … it also could provoke people.” 

Plus, “there’s already cameras in stores,” said Agustin. 

David Johnston, vice president of asset protection and retail operations for the National Retail Federation, the retail industry’s lobbying arm, provided a different perspective. He said the retailers he works with have said body cameras have helped to reduce conflict because people act differently when they know they’re being recorded, especially when those cameras are directly in front of a person. 

“Many of these body-worn cameras have reverse view monitors on them so … there’s a little video screen that you actually see yourself on camera. That in itself can be a very big deterrent,” said Johnston. “The moment that you see yourself is probably [when] you’re going to change your behavior, and that’s what I think the use of a body-worn camera can do.” 

As customers complain about merchandise being locked up in cases, body cameras are another technique retailers are trying out as they look to deter theft and make stores safer, said Johnston. 

“Walmart’s got tremendous exposure,” said Mark Cohen, former CEO of Sears Canada and former director of retail studies at Columbia Business School. “Walmart’s probably got a sales force that is very unhappy about what they’re exposed to … [and] feel like the store is not doing enough to protect the store and themselves. And this is a test to see whether it has any beneficial effects, both on deterring criminals and salving the anxiety and the irritation of their associates.”

Still, it’s not clear whether associates will feel better wearing body cameras. One longtime retail employee, who spent around a decade working at Hot Topic and has since left the industry, told CNBC that being threatened with violence was a regular part of the job, and they’re not sure body cameras would have stopped it.

“With these people, when they’re in our faces and they’re acting like they’re going to hit us or they’re making threats to meet us in the parking lot, they’re not thinking rationally,” said the former mall employee, who spoke on the condition of anonymity. “Even with a camera facing them, I don’t think they would care in the moment.”

The former employee said a body camera wouldn’t have made them feel safer in those interactions, either, but having a police presence nearby would have helped.

Last year, the NRF’s annual security survey found that 35% of retailers who responded said they were researching body cameras for retail employees or loss prevention staff. While no respondents said body cameras were fully operational, 11% said the retailers were either piloting or testing the solution. 

TJX Companies is one of them. 

Earlier this year, the off-price giant said it had started using body cameras in its stores, which include its TJ Maxx, Marshall’s and HomeGoods banners. On a call with analysts after the company reported fiscal first-quarter earnings in May, finance chief John Joseph Klinger said the devices had been effective in reducing shrink, or lost inventory.

“One of the things that we’ve added — we started to do last year, late towards the year, wear body cameras on our [loss prevention] associates,” said Klinger. “And when somebody comes in, it’s sort of — it’s almost like a deescalation where people are less likely to do something when they’re being videotaped. So we definitely feel that that’s playing a role also.”

In a statement, a TJX spokesperson said the loss prevention associates who have body cameras have gone through “thorough training on how to use the cameras effectively in their roles.”

“Video footage is only shared upon request by law enforcement or in response to a subpoena. Body cameras are just one of the many ways that we work to support a safe store environment. This includes a variety of policies, trainings, and procedures,” the spokesperson said. “We hope that these body cameras will help us de-escalate incidents, deter crime, and demonstrate to our Associates and customers that we take safety in our stores seriously.”

Startup basketball league Unrivaled announced on Monday it’s closed a Series A funding round, raising an additional $28 million before its inaugural season.

“Our players haven’t even taken the court yet and the foundation we are building with our partners unites unparalleled expertise, strategic insight, and an incredible product,” Unrivaled President Alex Bazzell said in a press release. “Together, we’re setting the stage for Unrivaled for years to come.”

The 3×3 women’s hoops league already secured $7 million in a seed round announced in May, meaning the league has received $35 million in total funds in 2024. The latest round was led by the Berman family and also included NBA champion Giannis Antetokounmpo and 28-time Olympic medalist Michael Phelps, among others.

Unrivaled was co-founded in 2023 by WNBA stars Breanna Stewart and Napheesa Collier and advertises that the player-owned organization will give every Unrivaled player “equity and a vested interest in its success,” according to the press release.

The league has signed 36 top players and said it offers the highest average salaries across any women’s professional sports league.

While the Women’s National Basketball Association has seen exponential growth in the last few years, superstar rookies Caitlin Clark and Angel Reese received base salaries just over $70,000, compared with star rookies in the National Basketball Association who received millions their first year.

Unrivaled announced last week it had signed Under Armour as its official uniform partner. It’s also signed an exclusive, multiyear media rights deal with Warner Bros. Discovery to air its games on TNT and truTV, as well as streaming platform Max. WBD participated in the Series A funding round, the league said Monday.

The round also included private investor Marc Lasry, University of South Carolina women’s basketball head coach Dawn Staley, and USC guard JuJu Watkins. Previous investors include soccer phenom Alex Morgan and actor and investor Ashton Kutcher.

The inaugural season begins on Jan. 17.

A rocky year for restaurants separated the industry’s biggest chains into winners and losers, as eateries competed for a smaller pool of customers who have grown more discerning about how they spend their dollars.

“I’ve been eating out less this year — it tastes just as good, and it’s way cheaper,” said Jennifer Jennings, who works in sales in Tulsa, Oklahoma.

Prices for food away from home had risen 3.6% over the last 12 months as of November, according to the Labor Department’s consumer price index. Grocery prices climbed just 1.6% during the same time, making cooking at home more attractive than dining out.

In response, many consumers have cut their restaurant spending, leading to slower sales and greater competition. The value wars reignited this summer. Chains took aim at their rivals in marketing and social media posts. And restaurants ramped up innovation, hoping that new menu items could boost sluggish traffic trends.

“I think the common thread behind everything right now is that the chains that are winning aren’t standing still. They’re doing something innovative, whether that’s new menu items … maybe that’s a marketing innovation … maybe it’s just hyper-emphasizing value,” said RJ Hottovy, head of analytical research for Placer.ai.

The year started off slow, with declining year-over-year traffic in January and February, before visits picked up again in March, according to industry tracker Black Box Intelligence. But eateries struggled again over the summer as consumers tightened their belts. Even a slew of value meals that promised cheap burgers and fries couldn’t stem the tide.

As traffic has fallen, bankruptcy filings have soared. Twenty-six bars and restaurants have filed for Chapter 11 this year, just one shy of tripling 2020′s total during the pandemic, according to the Debtwire Restructuring Database. This year’s filers included big names like Red Lobster and TGI Fridays.

While traffic has improved into the fourth quarter, some industry experts say it’s too early to predict a full recovery. A Numerator survey of more than 2,000 consumers found that the majority — across all income groups — plan to maintain their current spending levels at limited-service restaurants in the coming months.

But the chains that are already winning have seen their gains grow in the fourth quarter, further fueling their success.

Here are the winners and losers of the restaurant industry in 2024:

Value became restaurant CEOs’ new favorite word this year as they sought to reverse falling sales and appeal to inflation-weary consumers.

McDonald’s rang the alarm for the industry in late April, warning that consumers have become more “discriminating.” Three months later, the company’s second-quarter sales missed estimates and foot traffic to its U.S. restaurants shrank. The burger giant responded by rolling out a $5 combo meal, and many of its rivals followed suit with their own discounts and deals.

Traffic tied to value menu deals climbed 9% through October compared with the year-ago period, according to Circana data.

But value meals alone won’t save the industry.

For one, the lift from the deals isn’t enough to offset overall traffic declines, according to David Portalatin, Circana senior vice president and industry advisor for food and food service.

Plus, “value” has come to mean more than just the price tag. It also includes the experience and quality.

“For the low-income consumer, it’s the dollar amount that matters. For everybody else, it’s value. Even if you have money, you’re noticing things are more expensive, and you’re going to be more selective,” Michael Zuccaro, Moody’s Ratings vice president of corporate finance, told CNBC.

Fast-food restaurants have been losing customers this year, as customers pull back their spending.

Despite a proliferation of $5 combo meals, traffic to quick-service restaurants fell almost 2% this year through October, according to Circana data. That’s bad news for the industry because fast food accounts for nearly two-thirds of overall restaurant visits.

Industry experts attribute the decline in fast-food traffic largely to low-income customers. Diners who make less than $40,000 account for more than a quarter of both McDonald’s and Taco Bell’s customer bases, based on Numerator data.

Many of those consumers have chosen to spend less at fast-food restaurants, whether it’s skipping the order of French fries or forgoing a visit altogether to cook at home.

“There’s a lot more competition with grocery and other food retailers,” Hottovy said. “That’s where most of the competition is, particularly for that lower- to middle-income consumer.”

The fast-food chains performing the best right now, like Yum Brands’ Taco Bell, have high value perception.

Typically, when consumers tighten their belts in an economic downturn or recession, fast-food restaurants benefit. Even as low-income consumers cut back, higher-income consumers trade down to fast-food combo meals. But that hasn’t happened this time as consumers who make more money have instead embraced a more holistic definition of value to decide where to spend their money. Those diners want a high-quality, satisfying meal more than they care about a deal.

The fast-food chains that performed the best in 2024 tended to focus on chicken: Chick-fil-A, Raising Cane’s and Wingstop.

Chicken prices have stayed relatively stable this year, while beef prices have climbed. Poultry also benefits because some consumers consider it a more healthy option than red meat, even when the chicken is breaded and fried.

Chicken has been gaining market share from beef since the chicken sandwich wars of 2019, and restaurants have been leaning into the shift in consumer behavior. McDonald’s, for example, recently added the Chicken Big Mac to its U.S. menu permanently.

Upstarts like Raising Cane’s have also been making a splash. The privately held chain, known for its chicken tenders, is the fourth-largest chicken chain in the U.S., with a market share of 7.8%, according to Barclays. The chain could soon overtake KFC, the rare chicken chain that’s struggled to resonate with U.S. consumers this year.

KFC, which is owned by Yum Brands, has fallen behind in recent years as competition has intensified. Rivals like Chick-fil-A and Popeyes have stolen market share with buzzy menu items and the consumer shift toward boneless chicken.

Those chicken chains are stealing market share from burgers. McDonald’s, Wendy’s and Restaurant Brands International’s Burger King all had lackluster years.

McDonald’s has long dominated the burger category, with 48.8% market share, according to Barclays. But the chain saw its grip slip earlier this year as it scared off low-income consumers with its menu prices. However, by October, things were looking up for the Golden Arches: its $5 value meal was winning back customers, and its pricier Chicken Big Mac was boosting traffic.

Then came a fatal E. Coli outbreak linked to the slivered onions used in its Quarter Pounders. While the company acted quickly to contain the fallout, sales tumbled, especially in the affected states. McDonald’s plans to chip in $165 million to help out franchisees and boost marketing efforts. The chain has also revived its popular McRib for a limited time and unveiled a new value menu that will launch in January.

Analysts are optimistic that McDonald’s will be able to put the incident behind it. Traffic turned positive in the week ended Dec. 8 for the first time since the Centers for Disease Control and Prevention announced the outbreak on Oct. 22, according to a note from Gordon Haskett Research Advisors.

For rivals Burger King and Wendy’s, that’s bad news.

Like McDonald’s, Burger King launched a $5 value meal over the summer to appeal to thrifty consumers. Its same-store sales fell in the third quarter, although Restaurant Brands CEO Josh Kobza said the business is much healthier than it was in September 2022, when the parent company formally launched Burger King’s U.S. turnaround strategy.

Likewise, Wendy’s has been struggling to gain a foothold in the value wars. The company recently announced that it would close 140 underperforming restaurants in the fourth quarter, in the hopes that culling its footprint would boost the overall business.

But a promotion tied to the 25th anniversary of Spongebob Squarepants has been a green shoot for the burger chain. Some locations even sold out of key ingredients for the “Krabby Patty” meal, according to an October note from Wolfe Research.

Taco Bell is another rare fast-food winner.

The Mexican-inspired chain was the only one of Yum Brands’ three holdings to report same-store sales growth every quarter so far this year. (Pizza Hut and KFC actually reported three straight quarters of same-store sales declines.)

Yum executives have attributed Taco Bell’s success to consumers’ perception of its value. It was the top limited-service chain that diners across all income groups considered to be more affordable than groceries, according to a Numerator survey of more than 2,000 consumers.

Yum has also credited Taco Bell’s “brand buzz.” Look no further than actress Selena Gomez’s Instagram post sharing her recent engagement, with Taco Bell’s Mexican Pizza prominently displayed on a picnic blanket; the brand’s PR chief said in a LinkedIn post that Taco Bell didn’t sponsor the post.

And the chain keeps moving. It’s rolling out artificial intelligence software to take drive-thru orders in hundreds of locations. And in early December, it unveiled a new drink-focused concept, called the Live Mas Café. The first location is being tested in San Diego.

As Taco Bell continues to stand out, Yum plans to highlight the brand in late January with an investor presentation outlining its strategy for next year.

Fast-casual restaurants are the only restaurant segment to report traffic growth this year.

Cava’s stock has skyrocketed 192% this year. Wingstop’s quarterly same-store sales have climbed more than 20% in every report it’s released this year. And traffic to Chipotle’s restaurants keeps growing, despite online backlash over its portion sizes and the departure of longtime CEO Brian Niccol in September.

But it isn’t just those chains. Broadly, the fast-casual restaurant segment has seen traffic rise 3% through October compared with the year-ago period, according to Circana data. And dollar sales have increased 8% for the category.

“You spend more money by going out rather than staying in, and fast casual seems to strike the right balance of the value equation,” said Circana’s Portalatin.

Chipotle and its fellow fast-casual chains also benefit from a customer base that skews higher-income. Chipotle executives have previously said that they haven’t seen the same traffic reversals as the rest of the industry because the chain’s customers have more money to spend on eating out.

Of course, there were a few losers even in the fast-casual category. Chains like BurgerFi and Roti filed for Chapter 11 bankruptcy as their traffic fell and costs rose.

“Maybe they expanded too quickly and had other issues, and so they got into trouble,” John Bringardner, head of Debtwire.

Niccol shocked the restaurant world in August when Starbucks announced he’d be taking over as chief executive, following his predecessor’s ouster. Chipotle’s stock fell and Starbucks shares soared on the news in a combined market cap swing of $27 billion, showing Wall Street’s belief in Niccol as a leader.

Niccol’s departure from Chipotle came six years into his tenure. He ushered the burrito chain firmly out of its foodborne illness crisis, leaned into online ordering, modernized its locations for the digital age and led the company through the pandemic. Wall Street analysts expect that his replacement, Scott Boatwright, will stay the course set by Niccol.

On the other hand, Niccol’s appointment at Starbucks will likely mean big changes for the coffee giant. The board hired him after two consecutive quarters of same-store sales declines. Customers had become fed up with its high prices and chaotic, unwelcoming stores, and even discounts and new drink launches couldn’t persuade them to return.

As CEO, Niccol has pledged to bring the company “Back to Starbucks.” In late October, he shared early thoughts to reshape the U.S. business, from small tweaks like bringing back Sharpies to much more ambitious plans, like cutting back its extensive drinks menu.

Heading into 2025, Wall Street is excited about his proposals. Piper Sandler ranked Starbucks as its best idea for restaurants that it covers. BTIG also named it as a top pick, alongside Wingstop.

Traffic to casual-dining restaurants has fallen 2% year-to-date through October, according to Circana data.

This year’s decline in visits follows years of waning demand for casual-dining chains. They’ve struggled to compete since the Great Recession, which brought the dawn of fast-casual options that offer high-quality food at cheaper prices with greater convenience.

Some consumers are also skipping casual-dining chains and instead frequenting local independents.

The segment’s biggest losers this year were Red Lobster and TGI Fridays, which both filed for Chapter 11 bankruptcy. Red Lobster, which filed in May, has since exited bankruptcy with a new owner, leadership and strategy to turn around the business.

“You’re seeing some weeding out … of those concepts that are a little tired, a little under pressure,” Circana’s Portalatin said.

Other casual-dining chains that are struggling to win over customers include Applebee’s, owned by Dine Brands.

Still the category has some outliers, like Texas Roadhouse, Chili’s and Olive Garden. Their relative outperformance has boosted the segment’s metrics, hiding some chains’ deeper deterioration. (Olive Garden parent Darden Restaurants reports its latest quarterly results on Thursday.)

While casual restaurants struggle, one bright spot was Chili’s, owned by Brinker International. A table at the chain more associated with families became a hot reservation among Gen Z diners.

The bar and grill’s turnaround finally took hold this year, boosted by sharp advertising and TikTok-viral deals. In its latest quarter, Chili’s reported same-store sales growth of 14.1%, fueled by a 6.5% increase in traffic.

The chain’s “3 for Me” bundle, priced at $10.99, appealed to consumers looking for value. Plus, Chili’s advertised the promotion by taking aim at the prices of its fast-food rivals. And its Triple Dipper combo, which offers three appetizers, took off on TikTok, causing sales of the menu item to soar more than 70% in its latest quarter compared with last year. The Triple Dipper now accounts for 11% of the chain’s business, Brinker CEO Kevin Hochman said on the company’s latest earnings call on Oct. 30.

Chili’s success has spawned copycats. Rival Applebee’s recently picked a fight with Chili’s over its competing $9.99 value meal. And Olive Garden reintroduced its Never Ending Pasta Bowl promotion.

In mid-November, restaurant executives were feeling optimistic about 2025 at the Restaurant Finance and Development Conference in Las Vegas.

Circana’s Portalin echoed that sentiment, predicting that inflation will keep declining next year, bringing some much-needed stability to prices and the overall industry.

“Think about everything consumers have dealt with over the last year: natural disasters, global conflict, the polarizing national election,” he said. “If we could get all of that in the rear view mirror, and if we can maintain some of these basic fundamentals around income and labor, we think customer traffic will improve in 2025.”

But not everyone in the industry is so sure that 2025 will bring a restaurant recovery.

“I think we’re going to continue the same mindset that we’re leaving 2024 with, this value-oriented, deal-driven consumer,” Placer.ai’s Hottovy said.

Likewise, Moody’s outlook for the restaurant industry predicts modest sales growth, but Moody’s Zuccaro said companies will all be fighting for their share.

In other words, the value wars won’t slow down — and may even intensify.