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Brands across the restaurant industry are grappling with declining traffic, each segment facing unique challenges. In the casual dining space, brands are adapting to today’s complex market, from making strategic pricing decisions to reshaping their value propositions.
To gain insight into these shifts, we spoke with Ricky Richardson, CEO of Eggs Up Grill, about the current state of casual dining and how his team is navigating today’s market.
We covered:
You can find the full transcript below (edited for clarity).
AK:
All right. Well, thank you, everyone, for joining us. I'm Abhinav Kapur, co-founder and CEO here at Bikky. Joining me today is Ricky Richardson, the CEO of Eggs Up Grill. Welcome, Ricky.
RR:
Hey, Abhinav, thanks a lot. I appreciate the opportunity to talk today.
AK:
Likewise. Thanks so much for being here. So, the topic for today's conversation is the current state of casual dining. It’s intentionally broad because there’s a lot happening in the industry right now. But before we dive in, Ricky, could you give us a quick overview of Eggs Up Grill? Maybe start there, and then we can talk about the last 24 months, how the market has shifted, and how we got to this moment.
RR:
Absolutely. Eggs Up Grill is an 83-location breakfast, brunch, and lunch concept based here in South Carolina. We'll open four more locations in the next 10 days, bringing us to nearly 90 by year-end, with another 20 to 25 planned for next year. We’re a 100% franchise system, and the breakfast category is white-hot right now, with a lot of opportunity ahead.
Business has been fantastic; we have a lot of wind in our sails. But if you roll things back 24-30 months, we all went through a unique time, with long-lasting impacts on our industry, as in most others. Thinking back to 2021-2022, and particularly the second half of 2022 and into 2023, we dealt with significant inflation. Being based in the Southeast, we did experience some short-term labor pressures, but they resolved faster than in other parts of the country. Labor and inflationary pressures continue today but are mitigated somewhat.
The biggest impact, however, was inflation in our cost of goods sold. When you’re a breakfast concept, you sell a lot of bacon and eggs—especially eggs. We saw a 3x to 4x increase in the cost of eggs over about 6-9 months, which was huge. So, like many others in the industry, we had to pass on some price increases while still trying to maintain a perception of affordability and value for guests.
AK:
It sounds like that’s mitigated somewhat now, but it was a tough period in the second half of 2023 into early 2024. And it’s interesting that while the industry saw pricing pressure, the stimulus checks initially helped with disposable income and consumer spending. That’s begun to dry up now. How would you describe the current state?
RR:
Currently, we’re still in positive comp sales, which is great. However, we’re seeing traffic kind of flat or slightly down. We’ve noticed some of the lower-income segments of our consumers either dropping out of the category or reducing their visit frequency, while other segments continue to spend healthily. Affordability is critical in our category, and delivering on the brand promise is essential.
We’re fortunate to operate in an active category with unique, differentiated positioning. While we do have some short-term challenges related to frequency from some segments of our guest base, we’re in a good position overall.
AK:
That’s great. It’s a good rundown of where things have been in the past few years. Thinking about the current environment—traffic is flat to down, but comp sales are positive. Given your experience in casual dining, how does this compare to previous downturns? Are you noticing differences, say, from the value proposition of casual dining in light of fast-casual growth, delivery options, and so forth?
RR:
Good question. This is a unique moment. Past downturns I’ve experienced felt more macroeconomic—like higher unemployment, where people couldn’t spend because they didn’t have a job. This one feels more targeted to certain consumer segments, and I think it’s purely inflationary. The stimulus checks gave a sense of discretionary income to a segment of the population that historically hasn’t had it, so some consumers moved up to more full-service experiences from QSR or cooking at home.
With inflation impacting everyone now, those consumers are pulling back. Meanwhile, other consumer segments are holding steady. The industry took a lot of price increases in 2023 to keep up with inflation, and that’s put the value perception for many casual dining and QSR brands in a challenging place. The big question now is how to get back to a value proposition that drives traffic without compromising what your brand stands for.
AK:
Yes, I agree. And that idea of balancing price with maintaining value is important. Can you talk about how much Eggs Up has adjusted prices over the past few years?
RR:
Sure. Going back to 2020, our compound annual growth rate in price is just under 4%, so we were more conservative than others. Normally, we’d take a 2-3% increase, but in 2023, it was about 6-7%. So, our overall average is right at or a bit below 3%.
AK:
That’s pretty reasonable for the category. Has this approach to pricing helped you sustain positive comp sales by maintaining a stronger value perception? And outside of price, are there other things Eggs Up has done to keep positive sales momentum?
RR:
In this industry, it always starts with the food—you need quality and consistency. I mentioned our unique positioning; we’re a more affordable option in what we call the “better breakfast” category. For us, affordability and value aren’t just about discounts or combo meals; they’re about ensuring guests see quality at a reasonable price.
Our brand promise is “everything to make you smile.” That means delivering not just on price but on the overall guest experience. Affordability is a key part, and being more conservative on price allowed us to maintain the right perception without resorting to heavy discounting, which can dilute the brand.
AK:
I really like that framing—the difference between value and affordability. Affordability is about the whole guest experience, not just the price. And it sounds like you’ve been able to reinforce that through consistent investment in training and tools for your franchise partners.
RR:
Exactly. We’ve heavily invested over the past 12-18 months in training, both for the front-of-house and back-of-house teams. Our service and food quality need to be consistent and authentic. Friendliness and positivity are key differentiators for us, and those are what keep guests coming back.
AK:
That ties in well with a hunch I’ve had, which is that consumers are trading up from QSR to fast-casual for quality food at the same price, and trading down from casual dining when looking for convenience. Given these competing segments, how does casual dining—especially Eggs Up Grill—stand out in this value-driven environment?
RR:
Great point. Full-service dining has to be “worth it” in terms of the experience, from the ambiance to the speed and convenience. Guests can dine at Eggs Up Grill in under 40 minutes—just slightly longer than fast-casual. So, we’re able to deliver a fast, quality experience for just a few dollars more, but without the long wait times.
AK:
It’s interesting that consumers seem to want things faster and cheaper, a trend we’re definitely seeing in dining. But it sounds like you’re doing a good job of balancing affordability, speed, and service quality.
RR:
Yes, that’s a big focus for us. While off-premises business grew during COVID, full-service experiences are our primary focus. We don’t compete with fast-casual on convenience alone; instead, we aim to exceed expectations on quality, friendliness, and overall experience.
AK:
With all of that in mind, what do you expect for casual dining over the next 12 months? And specifically for Eggs Up Grill?
RR:
I think affordability will remain critical, and we may see more discounting and combo meals across the industry. However, we’ll keep focusing on executing at a high level to differentiate on experience. For Eggs Up Grill, we expect to keep expanding while maintaining a strong focus on guest satisfaction and affordability.
AK:
That makes a lot of sense. What macro factors do you think could turn things around for casual dining?
RR:
Unemployment and gas prices are two big ones. Gas prices in particular can be an early indicator of discretionary spending in restaurants. Gas prices have been softening over the last 6-8 weeks, which may help boost spending. But I think affordability will continue to be top of mind for consumers for the foreseeable future.
AK:
Absolutely. Thank you so much for these insights, Ricky. It’s been a great conversation!
RR:
Thank you, Abhinav. Appreciate the opportunity to talk through it all.
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