Chili's, Applebee's, and other casual dining chains are having a moment

• Casual restaurants like Applebee's and Chili's are winning customers, some from fast-food joints.
• Diners are finding that a sit-down meal at the chains doesn't cost much more than a McDonald's.
• The latest round of discounts at both kinds of restaurants is making it easier to find a cheap meal.

McDonald's will start offering a $5 meal on Tuesday. Burger King is offering a similar deal for the same price, and other fast-food chains are peddling promotions, too, in an attempt to lure back inflation-weary diners.

But fast-casual restaurants, or those that offer sit-down service but still focus on value, have been offering similar deals over the last few months — some big enough to make taking a seat in a restaurant for dinner as cheap as swinging by the nearest drive-thru.

This spring, for instance, Chili's advertised its "3 for Me" offer, which included an appetizer, burger, fries, and a drink for $10.99 in some areas. That's less than the price of full meals on the regular menu at McDonald's and Burger King.

The deals show that fast food isn't cheap anymore. As a result, some customers are looking for alternatives when they eat out — and casual chains like Chili's and Applebee's are capitalizing on the situation.

Some of the more budget-friendly sit-down restaurant chains have adopted a strategy of "very deep discounting" lately, Ricardo Cardenas, the CEO of Darden Restaurants, the company that owns chains including Olive Garden and Yard House, said on an earnings call on Thursday.

While Darden's restaurants didn't benefit from the tactic, Cardenas said it's making some of the company's rivals more competitive against fast-food players.

Food prices, both at restaurants and the grocery store, have risen over the last few years, straining consumers' budgets. Fast-food price hikes have been driven by higher ingredient costs as well as restaurant owners protecting their profit margins as labor costs rise.

The deal wars are poised to last through at least this year, John Peyton, CEO of Dine Brands, which owns chains including Applebee's and IHOP, said in late February during an earnings call.

Peyton confirmed that the company is offering more limited-time offers, or LTOs, this year to get customers ordering.

"We expect that the consumer will remain cautious in 2024, and we're planning for it with a compelling calendar of LTOs and value-driven promotions across our brands," Peyton said.

Do you work for Chili's, Applebee's, Olive Garden, or another major restaurant chain and have a story idea to share? Reach out to this reporter at abitter@businessinsider.com