Study Finds People Dine at Full Service Restaurants Less
It seems quick service restaurants are growing in popularity as dining costs rise
It’s no secret that food prices have risen exponentially in all categories from farm to table.
Restaurants hit with an ever-flattening bottom line and low profit margins usually have no choice but to pass these increases on to their dining guests.
But, according to a new report by Tom Weinandy, PhD Research Economist at Upside (a rewards program website), that might not be the best strategy.
Weinandy’s report concluded that many diners are responding to the rising costs of a night out at their favorite restaurant by visiting quick service establishments and grocery hot and cold food bars instead.
According to Upside, restaurants have increased their prices by about 5% from the period of September 2022 to September 2023. In contrast, the grocery industry held prices constant for much of 2023.
The consumer website then tracked spending via first-party data to find that restaurant patrons spent less per visit at restaurants, starting this past July.
Data from Black Box Intelligence backs up this claim, finding that in April 2023, full service restaurant traffic fell 3.5% compared to 2022. Upside’s data shows, however, that quick service restaurants (QSRs) have maintained year-over-year increases in foot traffic in 2023.
The study concludes that restaurateurs, instead of raising prices, might consider maintaining current prices, stating, “Consumers are clearly feeling the pinch in their budgets, and further increases in prices will just drive cost-conscious diners away even faster. Consider the case of grocery stores: following that difficult January, grocers have held prices relatively steady. And while grocers are also facing challenging times, they haven’t experienced a steady decline in spending per visit like restaurants have.”
The above study certainly hit home with me. As a food writer, editor, and general lover of dining in restaurants, I’ve felt the dread when the check comes and it may or may not be the same as my monthly car payment (I should note I have a Kia, not a Mercedes).
I have been eating at home more to secure the health of both wallet and body. Still, there is still nothing like the experience of going to a restaurant. I love the ambiance, the clink of glasses, the subtle ballet of back and front of house coexisting with the patrons. I don’t get those experiences with quick service establishments and prefer to cook at home or dine at a full service place.
For restaurateurs, I am aware the struggle is real — high rents, expensive ingredients, and the cost of taking care of staff in a respectable manner all add up.
But, maybe just maybe we can come up with a compromise: if you promise to not increase the cost of my cheeseburger and IPA to the point where I can’t justify it — I promise to patronize your restaurant more often.
Do you feel restaurants cost more to enjoy a meal? Do you dine out more or less recently? I’d love to hear your thoughts on this (as I type from a restaurant while enjoying a late Friday lunch).