Have People Slowed Down on Eating Out? Analyzing 2025 Consumer Trends

According to recent Ipsos data, about one-third of Americans reported cutting back on fast food, sit-down dining, and delivery services since the start of 2024. This shift reflects a broader trend of consumer behavior changing in response to persistent economic pressures.

Quick Summary

An analysis of 2025 dining trends reveals a definitive slowdown in consumer restaurant patronage, driven by lingering inflation, tightened discretionary spending, and a return to cost-effective home cooking and convenience-focused alternatives.

Key Points

• Inflation is a Primary Driver: Persistent inflation has directly led to higher menu prices and a decline in restaurant patronage, as consumers look to cut discretionary spending.

• At-Home Dining is Surging: The trend of cooking and preparing meals at home, popularized during the pandemic, has continued due to cost-effectiveness and increased convenience.

• Demographic Shifts are Significant: Younger consumers like Gen Z and Millennials are particularly pulling back on restaurant spending due to financial pressures, even as they enter peak dining-out life stages.

• Value Perception is Key: Diners are more critical of the value they receive for their money. Rising costs paired with stagnant or shrinking portion sizes are leading to a feeling of eroded value.

• Off-Premise is Dominant: The rise of takeout and delivery services continues to grow, with a majority of consumers preferring these options over traditional dine-in experiences.

• Industry Adaptation is Crucial: Restaurants are responding by refining value propositions, enhancing digital ordering, and focusing on improving the overall experience to remain competitive.

The Era of Economic-Driven Dining Shifts

In 2025, the restaurant industry is navigating a complex and challenging environment, marked by a clear deceleration in consumer dining frequency. This is not a uniform slowdown but a nuanced shift, heavily influenced by socioeconomic factors that have been reshaping consumer habits for several years. A primary driver is persistent inflation, which has pushed up menu prices and made eating out feel less valuable to many consumers. As costs for groceries, gas, and other necessities rise, discretionary spending on luxuries like restaurant meals is often the first to be curtailed, impacting both lower- and middle-income families.

Compounding this is the lingering effect of pandemic-era habits, which saw a significant increase in home cooking and a growing appreciation for the cost-effectiveness and comfort of at-home meals. Many consumers, having honed their culinary skills or discovered the ease of meal kits, are now more selective about when and why they dine out, reserving it for special occasions rather than regular, casual outings. The restaurant sector is therefore not just competing with other eateries but with the consumer's own kitchen, as well as an array of increasingly sophisticated takeaway and delivery services that offer restaurant-quality food in a more affordable, convenient package.

Why Are Diners Pulling Back? Unpacking the Key Factors

Several forces are converging to create a perfect storm for the restaurant industry, causing many to rethink their eating-out frequency. These include:

• Inflation and Budget Strain: Rising menu prices have eroded the perceived value of dining out. For many, a fast-food meal for the family now carries a price tag that rivals a home-cooked feast, making the latter the more logical choice. Consumers, particularly those on tighter budgets, are less willing to spend extra on restaurant food, regardless of its convenience.
• Value Erosion: Beyond the direct cost, consumers feel they are getting less for their money. 'Shrinkflation' and smaller portion sizes further fuel the sentiment that restaurant prices no longer match the value offered, leading to greater dining selectivity.
• The Comfort of At-Home Dining: The pandemic normalized eating at home, and the trend has stuck. With better-equipped home kitchens, access to online recipes via social media, and a desire for comfort, people are finding more enjoyment in preparing and consuming meals within their own four walls.
• Convenience and Technology: The proliferation of food delivery apps and convenient meal kits has intensified competition. A high-quality 'fakeaway' at home can often be a more appealing and affordable alternative to a restaurant experience, especially on a busy weeknight.
• Demographic Shifts: Younger consumers, namely Gen Z and Millennials, are facing rising debt and financial constraints, pushing them to underperform in restaurant spending compared to previous periods. While they value convenience, their financial reality is forcing a pullback.

Generational Differences in Dining Habits

Data from market intelligence firms reveals distinct patterns in how different age groups are adjusting their dining habits.

• Gen Z: While they are entering a peak restaurant-age life stage, many are constrained by financial realities. While valuing food away from home, their spending is showing significant softness, with a substantial portion cutting back on both fast food and sit-down dining.
• Millennials: The largest segment of the workforce, Millennials are increasingly moving toward more at-home meals, a trend predicted to continue in the coming years due to life-stage changes. Their financial priorities are shifting, and many are opting for more deliberate, budget-conscious dining choices.
• Lower-Income Consumers: This group has been the first and hardest hit by inflation, with aggressive cutbacks in dining out being a common response to stressed budgets. The rise in grocery prices has paradoxically driven some to cut back on fast food, traditionally seen as a budget-friendly option.

Off-Premise vs. On-Premise Dining in 2025

Feature	Off-Premise Dining (Takeout, Delivery)	On-Premise Dining (Dine-in)
Cost	Generally more affordable per order, though delivery fees and tipping can add up. Often allows for leftovers.	Higher average cost due to atmosphere, service, and drink purchases. Often includes tips.
Convenience	Maximized convenience. Order from anywhere, delivered to your door. No dressing up or travel.	Requires planning, travel, and potential waiting for tables. Less flexible.
Atmosphere	Fully customizable to home environment. Comfort and privacy are key factors.	Social and communal atmosphere. Quality of ambiance is a significant driver for selection.
Flexibility	Highly flexible meal times and pacing. Can pause, save food, or combine with other options.	Fixed-pace experience, dependent on restaurant staff and other diners.
Experience	Focuses on the food itself and the comfort of home. Less about the social outing.	A comprehensive experience combining food, service, and ambiance. A more social and celebratory option.

The Restaurant Industry's Response and Future Outlook

Restaurants are not standing still in the face of these headwinds. Many are refining their value propositions, focusing on off-premise dining, and leveraging technology to appeal to cost-conscious and convenience-seeking consumers.

Key strategies being deployed include:

1. Enhancing Off-Premise Offerings: From robust digital ordering platforms and loyalty programs to optimizing packaging for delivery, restaurants are doubling down on takeout and delivery to meet demand.
2. Focusing on Value: Many chains are re-emphasizing value through promotions, bundled meals, and loyalty rewards to entice customers who feel the squeeze of high prices.
3. Harnessing Technology: Apps for mobile ordering, loyalty tracking, and customized meal options are becoming standard. This digital interaction helps capture valuable customer data and streamline operations.
4. Improving the Dine-In Experience: For on-premise dining, the focus is on justifying the cost. This means elevated service, unique atmospheres, and high-quality food to ensure the experience is worth the price for those still willing to pay.
5. Adapting to Health Trends: Responding to consumer demand for healthier, customizable options is a priority, with many restaurants adding more plant-based, gluten-free, and customizable menu items.

The ultimate success of the restaurant industry will depend on its ability to evolve alongside its consumer base. The evidence suggests that while people have indeed slowed down their eating out frequency, they have not abandoned it entirely. Instead, they are becoming more discerning, value-oriented, and technologically-engaged, creating a new challenge for the sector to meet them where they are. You can read more about the external forces impacting the industry at FOCUS Investment Banking.

Conclusion

The question of whether people have slowed down on eating out is met with a definitive 'yes,' especially in the wake of inflationary pressures and shifts in consumer habits observed in 2025. This trend is not a simple rejection of restaurants but a recalibration of consumer priorities, with value, cost, and convenience taking center stage. The rise of at-home dining, fueled by economic constraints and technological convenience, presents a formidable challenge to the traditional dine-in experience. Successful restaurant adaptation hinges on embracing off-premise models, leveraging technology, and redefining the on-premise experience to justify the price point. As the economy continues to evolve, so too will dining habits, forcing the industry to remain agile and responsive to changing consumer needs.

Frequently Asked Questions

Is the decline in dining out consistent across all consumer groups?

No, the decline is not uniform. Lower-income consumers have been the most affected and have shown the most aggressive cutbacks, but recent reports indicate that middle-income earners and younger generations like Gen Z are also significantly pulling back on restaurant spending due to financial pressures.

How does inflation impact restaurant dining differently than other spending?

Inflation directly increases menu prices, making eating out feel more expensive relative to cooking at home. As costs for essential goods like groceries rise, dining out, which is often considered discretionary spending, is one of the first areas where people reduce their spending to save money.

Are people eating less fast food, or only sit-down dining?

The pullback is affecting a range of dining types. Data from Ipsos shows that about a third of Americans have cut back on fast food, sit-down restaurants, and delivery services since early 2024, indicating a widespread shift in dining habits.

What is the primary reason for the increase in at-home dining?

The main drivers are cost savings and convenience. With restaurant prices rising, cooking at home is a more economical choice. Additionally, modern meal kits and digital recipes make preparing high-quality meals at home more accessible than ever before.

How are restaurants responding to the shift toward at-home dining?

Restaurants are adapting by enhancing their off-premise offerings, such as optimizing takeout and delivery systems. They are also improving value propositions through loyalty programs and using technology to streamline ordering and connect with customers.

Why are Gen Z and Millennials spending less on restaurants?

Financial realities are a major factor. These younger generations are facing pressures from rising debt and limited asset accumulation, which is forcing them to be more cautious with their restaurant spending.

Is the trend of dining less likely to be permanent?

While dining out may never fully return to pre-pandemic or pre-inflation levels of frequency, it is unlikely to disappear entirely. Consumer habits have shifted to be more selective and value-conscious, meaning dining out is now more of a conscious choice for a specific experience rather than a routine convenience.