A restaurant meal doesn’t really compete with a grocery meal on price. It can’t.Circana recently calculated the average U.S. at-home dinner at approximately $3.78 per person. A restaurant can’t manufacture, staff, occupy, serve and deliver an experience at anything close to that price.

So why do consumers regularly pay $15, $20 or $30 instead?Because they’re not just buying food. They’re paying someone else to solve the meal.I think that distinction is becoming increasingly important for both restaurant companies and food manufacturers.

The price gap is the product

Consider a simple example. If I can feed myself at home for $5 but spend $20 eating out, the restaurant isn’t really selling me a $20 meal. It’s asking me to pay a $15 premium for everything I don’t have to do: shop, prepare, cook, clean, wait, and plan. And potentially for everything I get in return, including experience, social interaction, quality and enjoyment.

That $15 is where the real consumer decision happens.

The question isn’t whether $20 is expensive. The question is whether the additional $15 feels worth it.

We may be reaching the limits of traditional value pricing

More than 8 in 10 Canadians now say affordability influences their restaurant choice, and half of QSR customers report looking for promotions, discounts or deals.

But there is another number I think restaurant CEOs should be paying attention to. In January 2026, Canadian QSR sales increased 2.6% in nominal dollars but declined 2% after inflation, while full service restaurant sales grew 4.6% in real terms.

The category built around affordability was experiencing greater real pressure than the category built more heavily around experience.

If a quick meal that once cost $11 now costs $16, another restaurant option costs $21 and an at-home alternative costs $5, the consumer isn’t evaluating three prices independently. They’re evaluating three different value propositions. At some point, being cheaper stops being enough.

The manufacturer has the opposite opportunity

This same pricing paradigm creates an enormous opportunity for food manufacturers.

If the consumer’s alternative is a $20 restaurant occasion, a $9 premium prepared meal at retail doesn’t necessarily look expensive. It can look like an $11 saving.

The relevant competitor may be the occasion it replaces.

A manufacturer might ask: “What premium can I charge versus the category?”

I think the better question is: “What is the consumer paying today to solve the same problem?”

Our prediction for 2027

At SHG, we believe the next stage of food pricing will increasingly be built around occasion value rather than category price.

Restaurants will need to justify the premium consumers pay over eating at home. Manufacturers will increasingly capture part of that premium by creating retail products that deliver more of the convenience and experience traditionally provided by restaurants.

The opportunity is not necessarily to lower price. It is to understand what your product is replacing and price against the value of that alternative.

Do you know what your real price competitor is?

By connecting pricing, transactions, products, customer behaviour, geography, competitive alternatives and consumer economics using SHG PerformANT AI™, we can ask:

  • What is the consumer actually substituting for our product?
  • What premium are they currently paying us to solve the occasion?
  • Where is that premium becoming too large?
  • Which products should be priced against an occasion rather than a category?

Because the most important competitor to your $20 product may not be selling anything close to $20.