Dairy Queen pauses Middle East growth plans, takes on AI in drive-thrus

• Middle East expansion on hold as franchisees address supply-chain disruptions from Strait of Hormuz restrictions; Dairy Queen had planned to enter Saudi Arabia
• Lower-income U.S. customers reducing spending due to elevated inflation and high borrowing costs, while wealthier customers continue purchasing; company offering $5 and $7 meal deals
• Testing AI chatbot in 50 drive-thrus with current 90% order accuracy, aiming for 99%; AI allows employees to focus on quality control and customer service

Dairy Queen Pauses Middle East Expansion, Deploys AI in Drive-Thrus

Key Developments:

Berkshire Hathaway-owned Dairy Queen has suspended expansion plans in the Middle East due to regional tensions and supply chain disruptions affecting the Strait of Hormuz. CEO Troy Bader stated that franchisees are taking a "hold position" and waiting to assess the situation before proceeding. The company currently operates in Bahrain, Kuwait, Oman, Qatar, and the UAE, with previous interest in entering Saudi Arabia.

Financial Performance:

Dairy Queen operates over 7,900 stores across 20 countries, generating approximately $6.6 billion in total sales in 2025, up 3% year-over-year. China represents the fastest-growing market with more than 1,800 stores and 10% same-store sales growth last year.

Consumer Trends:

The U.S. market is showing customer segmentation, with wealthier consumers continuing to purchase premium items like Blizzards and burgers, while lower-income diners are cutting back due to elevated inflation, high borrowing costs, and rising fuel prices. To address affordability concerns, Dairy Queen is offering $5 mix-and-match options and $7 meal deals.

Technology Initiative:

Dairy Queen plans to test AI-powered ordering chatbots from technology company Presto in approximately 50 drive-thrus. Initial testing achieved 90% order accuracy, with a target of 99%. Bader emphasized that AI allows employees to focus on quality control and customer hospitality while monitoring automated orders. This follows similar AI adoption by competitors including McDonald's, Taco Bell, Burger King, and Wendy's.