Research
September 17, 2026
Affordability Pressures Mount, but Consumers Continue to Prioritize Restaurants
Restaurant operators continue to navigate a complex mix of factors affecting sales, traffic, and profitability. Encouragingly, the broader economy has remained resilient, with the National Restaurant Association forecasting 2.2% growth in real GDP in 2026. Higher-income households continue to drive consumer spending, while solid wage growth has supported broader consumer activity, particularly in the services sector. Business investment, especially in artificial intelligence, has also provided a meaningful boost to economic growth.
At the same time, the industry faces significant headwinds. Inflation pressures have reemerged, leaving consumers highly value-conscious and increasingly selective in how they spend their hard-earned dollars. Tight household budgets and gasoline prices that have once again climbed above $4 per gallon have only added to those challenges. Labor market conditions remain another concern. Although August job growth exceeded expectations, hiring has been softer this year than in recent years, and labor force participation remains near five-year lows, leaving too many potential workers on the sidelines. This continues to complicate recruitment efforts while limiting broader economic growth and consumer spending.
For restaurant operators, this mixed economic backdrop makes demand forecasting more difficult and business decisions more challenging. Many operators remain reluctant to pass along higher costs for fear of further weakening already-soft traffic trends. Yet labor, food, and other operating expenses continue to rise, putting additional pressure on profit margins. In a survey conducted this summer, one-third of operators reported that they were not profitable during the first half of the year. Likewise, the Association's monthly tracking survey continues to find widespread concern about the economic outlook, sales performance, and rising costs.
Despite these challenges, the industry has demonstrated notable resilience. Consumers continue to prioritize restaurant occasions, even as they pull back spending in other areas. Combined with continued economic growth and solid household income gains, that provides reasons for cautious optimism. Nevertheless, operators will need to carefully balance value, hospitality, and operational efficiency as they navigate an environment marked by elevated costs, uncertain demand, and ongoing workforce challenges.
Against this backdrop, the Association's third-quarter Consumer Insights survey revealed a consumer landscape marked by both resilience and financial strain. The findings underscore the uneven nature of the current economy and help explain the opportunities and challenges facing restaurant operators today:
Taken together, these findings point to a consumer environment that is increasingly bifurcated. While many households continue to feel financially secure, others are facing mounting pressures, reinforcing the growing "K-shaped" divide in consumer spending and restaurant demand.
For restaurants, the data offer both encouraging and cautionary signals. On the positive side, restaurants remain consumers' top discretionary spending priority, underscoring the industry's continued relevance even as households pull back in other spending categories. In the third quarter, 53% of consumers reported dining at a restaurant in the previous week, 50% ordered takeout or delivery, and 36% purchased a coffee or snack. While these figures remain healthy, both dine-in and coffee/snack occasions were down three percentage points from the second quarter.
Restaurant engagement remains especially strong among younger consumers. Fully 85% of Generation Z reported dining at a restaurant, ordering takeout or delivery, or purchasing a coffee or snack in the previous week. Even among Baby Boomers, engagement was solid at 74%, with that cohort the only age group to post an increase in the third quarter. Income disparities were also evident. Ninety-two percent of households earning $100,000 or more reported restaurant engagement during the week, compared with 81% of households earning $50,000 to $99,000 and 71% of those earning less than $50,000. Notably, the higher-income segment was the only group to see engagement rise from the second to the third quarter.
At the same time, there are increasing signs that consumers are moderating restaurant spending. In the third quarter, 39% of consumers reported spending less at restaurants, including takeout and delivery, than they did in the second quarter. The pullback was most pronounced among Generation Z, with nearly half reporting lower spending, while Baby Boomers reported the smallest decline. Across every generation, more consumers reduced their restaurant spending than increased it. Overall, 23% spent more, while 38% reported little change.
Affordability concerns are also taking a toll. Forty-three percent of consumers said it has been somewhat or very difficult to dine at a restaurant during the past six months, and 39% reported similar challenges with takeout and delivery. Many consumers indicated that these pressures have led them to cut back on restaurant visits and spending over the past year. Indeed, 45% said they spent less at full-service restaurants, while 42% reported reduced spending at fast-food restaurants, sandwich shops, cafés, or on takeout and delivery. Four in ten spent less at coffee and snack establishments. More concerning, 46% said they had increased spending at grocery stores, highlighting the ongoing competition for consumers' food dollars.
Consumers are also becoming more deliberate in how they spend when dining out. In the third quarter, 40% reported relying more heavily on discounts and value promotions, up from 35% in the second quarter, while 36% said they shifted toward less expensive restaurants, up from 34%. Meanwhile, 34% reported ordering fewer add-ons, such as desserts and beverages.
Overall, the data underscore the complexity of the current consumer environment. Rising stock prices and home values continue to bolster spending among higher-income households, while many lower- and middle-income consumers, along with younger adults, remain under financial strain. Employment status further amplifies these differences, reinforcing the uneven, "K-shaped" nature of consumer spending. At the same time, elevated gasoline prices and geopolitical uncertainty are placing additional pressure on household budgets. Even as consumers continue to prioritize restaurant occasions relative to other discretionary purchases, there are growing signs that spending in the sector has softened.
For restaurant operators, these trends point to continued resilience and modest growth in the year ahead. However, ongoing uncertainty surrounding consumer sentiment, household finances, labor availability, and operating costs suggests that optimism should remain measured as the industry navigates a challenging and unpredictable environment.
At the same time, the industry faces significant headwinds. Inflation pressures have reemerged, leaving consumers highly value-conscious and increasingly selective in how they spend their hard-earned dollars. Tight household budgets and gasoline prices that have once again climbed above $4 per gallon have only added to those challenges. Labor market conditions remain another concern. Although August job growth exceeded expectations, hiring has been softer this year than in recent years, and labor force participation remains near five-year lows, leaving too many potential workers on the sidelines. This continues to complicate recruitment efforts while limiting broader economic growth and consumer spending.
For restaurant operators, this mixed economic backdrop makes demand forecasting more difficult and business decisions more challenging. Many operators remain reluctant to pass along higher costs for fear of further weakening already-soft traffic trends. Yet labor, food, and other operating expenses continue to rise, putting additional pressure on profit margins. In a survey conducted this summer, one-third of operators reported that they were not profitable during the first half of the year. Likewise, the Association's monthly tracking survey continues to find widespread concern about the economic outlook, sales performance, and rising costs.
Despite these challenges, the industry has demonstrated notable resilience. Consumers continue to prioritize restaurant occasions, even as they pull back spending in other areas. Combined with continued economic growth and solid household income gains, that provides reasons for cautious optimism. Nevertheless, operators will need to carefully balance value, hospitality, and operational efficiency as they navigate an environment marked by elevated costs, uncertain demand, and ongoing workforce challenges.
Against this backdrop, the Association's third-quarter Consumer Insights survey revealed a consumer landscape marked by both resilience and financial strain. The findings underscore the uneven nature of the current economy and help explain the opportunities and challenges facing restaurant operators today:
- 65% of consumers rated their financial well-being positively. Sentiment was strongest among Gen Z, Baby Boomers, and higher-income households.
- Consumers who felt more positive about their personal financial situation were significantly more likely to dine out at restaurants.
- 39% of adults said their financial situation had worsened over the past year, with Gen Z, Millennials, and households earning less than $100,000 most likely to report declines.
- Half of consumers said it has become more difficult to cover their household expenses over the past year.
- 34% of consumers said they regularly spend more than they earn, while roughly half reported doing so at least occasionally. Younger and lower-income respondents were especially likely to face these budget pressures.
Taken together, these findings point to a consumer environment that is increasingly bifurcated. While many households continue to feel financially secure, others are facing mounting pressures, reinforcing the growing "K-shaped" divide in consumer spending and restaurant demand.
For restaurants, the data offer both encouraging and cautionary signals. On the positive side, restaurants remain consumers' top discretionary spending priority, underscoring the industry's continued relevance even as households pull back in other spending categories. In the third quarter, 53% of consumers reported dining at a restaurant in the previous week, 50% ordered takeout or delivery, and 36% purchased a coffee or snack. While these figures remain healthy, both dine-in and coffee/snack occasions were down three percentage points from the second quarter.
Restaurant engagement remains especially strong among younger consumers. Fully 85% of Generation Z reported dining at a restaurant, ordering takeout or delivery, or purchasing a coffee or snack in the previous week. Even among Baby Boomers, engagement was solid at 74%, with that cohort the only age group to post an increase in the third quarter. Income disparities were also evident. Ninety-two percent of households earning $100,000 or more reported restaurant engagement during the week, compared with 81% of households earning $50,000 to $99,000 and 71% of those earning less than $50,000. Notably, the higher-income segment was the only group to see engagement rise from the second to the third quarter.
At the same time, there are increasing signs that consumers are moderating restaurant spending. In the third quarter, 39% of consumers reported spending less at restaurants, including takeout and delivery, than they did in the second quarter. The pullback was most pronounced among Generation Z, with nearly half reporting lower spending, while Baby Boomers reported the smallest decline. Across every generation, more consumers reduced their restaurant spending than increased it. Overall, 23% spent more, while 38% reported little change.
Affordability concerns are also taking a toll. Forty-three percent of consumers said it has been somewhat or very difficult to dine at a restaurant during the past six months, and 39% reported similar challenges with takeout and delivery. Many consumers indicated that these pressures have led them to cut back on restaurant visits and spending over the past year. Indeed, 45% said they spent less at full-service restaurants, while 42% reported reduced spending at fast-food restaurants, sandwich shops, cafés, or on takeout and delivery. Four in ten spent less at coffee and snack establishments. More concerning, 46% said they had increased spending at grocery stores, highlighting the ongoing competition for consumers' food dollars.
Consumers are also becoming more deliberate in how they spend when dining out. In the third quarter, 40% reported relying more heavily on discounts and value promotions, up from 35% in the second quarter, while 36% said they shifted toward less expensive restaurants, up from 34%. Meanwhile, 34% reported ordering fewer add-ons, such as desserts and beverages.
Overall, the data underscore the complexity of the current consumer environment. Rising stock prices and home values continue to bolster spending among higher-income households, while many lower- and middle-income consumers, along with younger adults, remain under financial strain. Employment status further amplifies these differences, reinforcing the uneven, "K-shaped" nature of consumer spending. At the same time, elevated gasoline prices and geopolitical uncertainty are placing additional pressure on household budgets. Even as consumers continue to prioritize restaurant occasions relative to other discretionary purchases, there are growing signs that spending in the sector has softened.
For restaurant operators, these trends point to continued resilience and modest growth in the year ahead. However, ongoing uncertainty surrounding consumer sentiment, household finances, labor availability, and operating costs suggests that optimism should remain measured as the industry navigates a challenging and unpredictable environment.