KFC Goes Small, Chipotle Goes Big. Why Restaurants are Sizing up New Strategies.

Dow Jones10-16

KFC's new Go Bucket can fit in your car's cupholder. Chipotle Mexican Grill, meanwhile, is touting family-portion taco plates.

These changes are coming as restaurant chains rethink how much food customers want to eat -- and how much they're willing to pay.

With food and labor costs still elevated, chains have limited room to cut prices without hurting their profits. So to win over consumers who are becoming more selective about dining out, restaurants are experimenting with different portion sizes and formats to give customers more reasons to visit.

Chains known for large, shareable meals are introducing smaller portions, while restaurants that typically serve individual diners are expanding into family and group orders.

In August, Domino's Pizza introduced the Domino, an individual-sized Detroit-style pizza priced at $6.99 apiece when customers purchase at least two qualifying items through its Mix and Match deal.

The new offering isn't necessarily cheaper than Domino's traditional pizzas, but it is designed to help the chain compete for dining occasions where customers typically order individual fast-food meals, CEO Joe Jordan told Barron's in an interview.

Jordan said Domino's is increasingly competing with burger, chicken and taco chains, particularly on third-party delivery platforms where customers can easily compare restaurants.

The product also aims to appeal to group orders where customers want their own toppings.

"Sometimes people want to share a meal, but they don't want to share the food," said Jordan.

Whether the Domino will help the pizza chain remains uncertain -- the product was available for only one week of the latest reported quarter, and management hasn't disclosed its sales performance.

But some competitors have begun seeing encouraging results from similar experiments. Olive Garden, owned by Darden Restaurants, completed the nationwide rollout of its Lighter Portions menu in January, offering seven popular entrees in smaller sizes for less than $15.

The move targets customers looking for a lighter meal or more affordable option without giving up a sit-down restaurant experience. It has proven particularly popular during weekend lunches, when Olive Garden doesn't offer its traditional weekday lunch menu.

Management says customers ordering smaller portions are returning more frequently, suggesting the offering may be attracting visits that otherwise wouldn't have happened.

But the financial trade-off is real. In Darden's latest fiscal quarter, management noted that smaller portions reduced Olive Garden's average-check growth by about half a percentage point, while denting its restaurant profit margin by roughly 0.3 percentage point.

Sweetgreen is also trying to reach new customers with more affordable options.

The salad chain introduced wraps nationwide in May that are priced below $15, averaging about $12.50. The hope is to attract budget-conscious diners who might not want a traditional salad or bowl that typically costs more.

The products have quickly gained traction. During its second-quarter earnings call, Sweetgreen said wraps accounted for nearly 20% of orders, helped improve transaction trends and attracted repeat visits. More than half of wrap customers returned within 30 days.

Management estimated that wraps boosted the number of transactions by about five percentage points as it attracts more customer orders. But because customers were spending less per order, the benefit to comparable sales was only about two percentage points.

Still, the success hasn't been enough to reverse Sweetgreen's broader struggles. Comparable sales fell 6.2% in the latest quarter, while restaurant-level profit margins declined to 13.1% from 18.9% a year earlier.

The margin decline was driven by higher ingredient and labor costs, promotional discounts and larger chicken and tofu portions aimed at improving customer satisfaction, according to the company. Sweetgreen said the wraps are priced to generate margins comparable to other menu items.

Chipotle Mexican Grill, meanwhile, is offering bigger orders rather than smaller meals.

The burrito chain introduced Build-Your-Own Chipotle in August 2025, allowing groups of four to six to assemble their own bowls, tacos and salads from family-style portions. Now marketed as Family Meals, the offering costs less than $10 per person.

"We're focused on expanding to group occasions where guests choose Chipotle," CEO Scott Boatwright said during the company's second-quarter earnings call in July.

He said repositioning the offering as a family meal had led to a notable increase in orders. Chipotle said Family Meals and catering together accounted for 2% to 3% of sales, although the company hasn't disclosed sales figures for the product alone.

KFC, owned by Yum! Brands, is also renewing its push into on-the-go snacking. Earlier this month, the chain introduced Go Buckets, the miniature buckets combining chicken nuggets, wings or tenders with fries or potato wedges starting at $3.49 that fit inside a car cupholder.

The concept isn't entirely new -- KFC had introduced similar products in the past -- but the latest launch reflects the chain's renewed effort to capture snack occasions beyond traditional meals, although it hasn't disclosed sales figures for the new product.

For investors, the question is whether these new offerings can generate additional sales and profits. Smaller portions may encourage more frequent visits, while family bundles could increase order sizes. But neither guarantees higher profits.

If customers simply switch from more expensive meals to cheaper alternatives, the strategy could backfire. A bigger menu, after all, doesn't necessarily mean a bigger bottom line.

 

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