Dining out in a downturn: rising prices shift restaurant habits

Dining out plays a significant role in the economy, influencing employment, consumer spending, and overall economic activity. But with restaurant prices rising, and disposable incomes being squeezed, fewer consumers are able to afford it.

To explore how consumers are changing their dining out habits, and which demographics are most affected, we surveyed 1,000 working-age consumers in the US and the UK. We also investigated the tactics consumers are using to bring down the cost of dining out, providing useful insight for F&B outlets as they adapt their strategies.  

Overall findings

• 86% of consumers think restaurant prices are more expensive than a year ago
• There has been a net reduction in the amount of disposable income consumers have to spend on dining out
• More than half of consumers are eating out less frequently
• 19% of consumers have started eating at cheaper restaurants in response to economic conditions
• Top money-saving behaviors for restaurant-goers in the US include skipping appetizers or desserts and ordering value meal deals, and in the UK, using discount vouchers and loyalty program benefits

US results

Rising prices force consumers to dine out less frequently

A huge 86% of Americans agree that restaurant prices are more expensive than they were a year ago, with a third of consumers deeming them “much more expensive”. At the same time, increasing cost-of-living expenses are reducing the amount of disposable income people have to spend on things like dining out: 48% of consumers say they have less to spend than last year (including 22% who have “a lot less”).

While some consumers have seen an increase in their disposable incomes (29%), when this is deducted from those who have experienced a decrease, we’re still left with a net reduction of -19%. This means many consumers can’t afford to eat out as frequently as before.

Just over 57% of consumers say they are dining out less often, with older Americans especially likely to have cut down on meals out (66% of over 50s). Women also appear to be feeling the squeeze more than men: 62% say they dine out less often now, versus 51% of men [view full US survey dashboard]. 

Interestingly, consumers aged 50+ are significantly more likely to perceive restaurant prices as “much more expensive” (40% versus 31% of 18-30-year-olds and 29% of 31-49-year-olds). This is no doubt tied to the increased pressure they report feeling on their disposable incomes: 56% say they have less to spend versus 48% of 31-49-year-olds and 39% under 30s. 

Poor economy gives boost to budget food outlets

Rather than giving up on dining out altogether, many Americans – especially younger ones – are pivoting to cheaper restaurants and cheaper food. Just over 19% of consumers say they have started dining at cheaper establishments due to economic factors, while 28% choose cheaper menu options.

Consumers aged 18-30 are the demographic most likely to be taking advantage of budget options: while 50% are dining out less, almost as many (41%) are simply choosing less expensive food when they eat out – that’s in comparison to 29% of 31-49-year-olds and 17% of over 50s. Likewise, 24% of under 30s have started frequenting more economic restaurants, compared with 20% of 31-49-year-olds and 13% of over 50s. 

It would seem that now is a good time to be a budget restaurant. Our data shows that the cheaper the food outlet, the more frequently they’re likely to be visited: Americans typically eat at fast food restaurants or cafes “a few times a week”, and at casual dining restaurants “a few times a month”. Upmarket restaurants are the least likely to be visited, with consumers typically only attending them “a few times a year” or less frequently.  

69% of 18-30-year-olds dine at fast food restaurants at least once a week

Fast food outlets and cafes are by far the most popular type of restaurant across all demographics, with 69% of 18-30-year-olds dining at them at least once a week, 58% of 31-49-year-olds, and 48% of over 50s. And while high earners are almost twice as likely as low earners to eat at upmarket and casual dining restaurants, there’s almost no difference when it comes to fast food (around 55%).

Will 2025 see the death of the three course meal?

While US consumers might be dining out less, they’re also looking for creative ways to bring down the cost of their bill when they do. They employ a variety of tactics to manage their dining out expenses, but the most common is to skip appetizers or desserts (37%), threatening the traditional three course meal. 

Although this might sound better for consumers’ waistlines, they’re not always reducing the amount they eat, with almost as many (36%) looking for value bundle meal deals. Meanwhile, the third-most popular money saving behavior is using discount coupons (35%).    

Consumers aged 18-30 over-index for using discount coupons (42%) as well as loyalty programs (36%). They’re also most likely to dine during promotional hours (34%) and order appetizers instead of mains (21%). Meanwhile, their slightly older counterparts (aged 31-49) over-index for ordering a main course only (43%). 

Women are more likely than men to share dishes to save money (26% vs 18%) and order tap water (28% vs 22%). Surprisingly, consumers with a household income over $100k also show a tendency for ordering tap water instead of paying for drinks (36% versus 20% of those with a household income below $50k). They’re more likely than low earners to dine in promotional hours too (33% vs 20%), showing that value options can appeal to consumers from all socio-economic backgrounds. 

UK results

Restaurants getting too expensive for many consumers

Restaurant prices have gone up according to the vast majority of Brits (86%), with over a quarter (28%) finding them “much more expensive” compared to last year. Simultaneously, rising living costs are squeezing disposable incomes, leaving 43% of consumers with less to spend, including 15% who report having “a lot less.” 

Although 29% have seen their disposable income increase, this doesn’t offset the larger proportion experiencing a decrease, resulting in a net reduction of -14%. Consequently, many consumers now have less financial flexibility for dining out as often as they used to [view full UK survey dashboard].

Just over half of consumers say they are dining out less often, with older Brits especially likely to have cut down on meals out (55.5% of over 50s versus 44% of under 30s and 51% of 31-49-year-olds). Lower earners have also been hit hard: 61% of those with a household income under £35k say they’re eating out less.

Interestingly, consumers aged 18-30 are significantly less likely to say the amount of disposable income they have to spend on dining out has been affected. While 49% of those aged 50+ and 45% of 31-49-year-olds report having less disposable income, only 32% of 18-30-year-olds say the same. In fact, 44% say they have more disposable income, showing this is a key demographic for restaurant brands to target. 

Budget food sector remains robust amid economic downturn

Faced with economic pressures, many British consumers, particularly younger adults, are adapting their dining habits rather than stopping eating out. Approximately 19% report switching to less expensive restaurants, and nearly a quarter (24%) are opting for cheaper dishes when they dine out.

This trend is most pronounced among 18-30-year-olds: a significant 35% are choosing more affordable food options when they visit restaurants, compared to 22% of 31-49-year-olds and only 18% of those over 50. Similarly, 24% of under-30s have started visiting more budget-friendly eateries, compared with 21% of 31-49-year-olds and 13% of consumers aged 50 and above.

Our data shows that the cheaper the food outlet, the more frequently they’re likely to be visited: Brits typically eat at fast food restaurants or cafes up to a few times a week, and at casual dining restaurants up to a few times a month. Upmarket restaurants are the least likely to be visited, with consumers typically only attending them up to a few times a year.

56% of 18-30-year-olds dine at fast food outlets at least once a week

Young consumers are significantly more likely to visit all types of restaurants more frequently: 56% of 18-30-year-olds dine at fast food outlets and cafes at least once a week, versus 46% of 31-49-year-olds, and 30% of over 50s. Just over 36% eat at casual dining restaurants weekly (compared with 30% and 17% of their older counterparts), while 34% say they regularly visit upmarket restaurants (versus 19% of 31-49-year-olds and just 4% of over 50s).

Customer engagement is a key way to drive restaurant loyalty 

To manage the cost of eating out, 34% of UK consumers rely on discount vouchers, and almost as many (32%) look to take advantage of loyalty programme benefits. This highlights an opportunity for restaurant brands to engage with customers via owned-channels, pushing through offers that keep them coming back.  

Surprisingly, consumers with a household income over £75k are especially likely to use loyalty card benefits to reduce restaurant costs (48% versus 26% of those with a household income below £35k). As such, loyalty schemes represent a great way to reach this valuable segment. 

Other popular money saving behaviours consumers admit to include skipping starters and desserts, and avoiding premium menu items such as steak (both around 30%), showing that having meals that range in price is important for accessibility. Likewise, offering combo meals, set menus or value deals makes restaurant dining more affordable for 28% of consumers. 

Consumers aged 18-30 over-index for ordering only a main meal (35%) or ordering a starter as a main (10%) as well as sharing dishes with others to reduce costs (21%). Similarly, women are more likely than men to share dishes to save money (25% vs 12%) and skip appetisers and desserts (34% vs 25%).