Restaurant operators are navigating a challenging economic environment marked by resilient consumer demand, rising operating costs and growing affordability concerns. While the broader economy remains on stable footing, many consumers are becoming more selective about discretionary spending, creating a more complex outlook for restaurants.
According to the National Restaurant Association, real GDP is expected to grow 2.2 percent in 2026, supported by spending from higher-income households, solid wage gains and continued business investment, including in artificial intelligence. However, inflationary pressures have reemerged, household budgets remain tight and gasoline prices have climbed above $4 per gallon in many markets.
Labor market conditions also continue to present challenges. Although recent job growth exceeded expectations, hiring has been slower than in recent years and labor force participation remains near five-year lows, making recruitment more difficult for restaurant operators.
These conditions have made forecasting demand increasingly difficult. Many operators remain hesitant to raise menu prices out of concern that higher costs could further weaken traffic. At the same time, labor, food and other operating expenses continue to increase, putting pressure on profitability. In a survey conducted this summer, one-third of operators reported they were not profitable during the first half of the year.
Despite these headwinds, consumers continue to prioritize restaurant occasions over other discretionary purchases. The Association’s third-quarter Consumer Insights survey found that sixty-five percent of consumers rated their financial well-being positively, although financial confidence varied significantly by age and income level.
The survey also found that thirty-nine percent of adults said their financial situation had worsened during the past year, while half reported that covering household expenses has become more difficult. In addition, thirty-four percent said they regularly spend more than they earn, with younger consumers and lower-income households reporting the greatest financial pressure.
The findings point to an increasingly bifurcated consumer environment. Higher-income households generally remain financially secure and continue spending on dining occasions, while many lower- and middle-income consumers are facing greater budget constraints.
Restaurants continue to benefit from strong consumer engagement. In the third quarter, fifty-three percent of consumers reported dining at a restaurant during the previous week, fifty percent ordered takeout or delivery, and thirty-six percent purchased a coffee or snack. However, dine-in and coffee-and-snack occasions each declined three percentage points from the second quarter.
Younger consumers remained the industry’s most engaged customer segment, with eighty-five percent of Generation Z reporting a restaurant-related purchase or visit in the previous week. Restaurant engagement also increased with income level, reaching ninety-two percent among households earning $100,000 or more annually.
At the same time, signs of spending moderation are becoming more evident. Thirty-nine percent of consumers reported spending less at restaurants during the third quarter than they did during the second quarter, while only twenty-three percent said they spent more.
Affordability concerns are playing an increasingly important role in consumer decision-making. Forty-three percent of consumers said it has been somewhat or very difficult to dine at a restaurant during the past six months, while thirty-nine percent reported similar challenges with takeout and delivery.
Many consumers have adjusted their behavior in response. Forty percent said they are relying more heavily on discounts and promotions, up from thirty-five percent in the second quarter. Thirty-six percent reported choosing less expensive restaurants, while thirty-four percent said they are ordering fewer add-ons such as beverages and desserts.
The survey also found that forty-six percent of consumers increased spending at grocery stores, underscoring the ongoing competition for food dollars.
For restaurant operators, the data present both opportunities and risks. Demand remains resilient, particularly among higher-income households and younger consumers, but rising costs, labor challenges and uneven consumer spending patterns continue to create uncertainty. Moving forward, operators will need to balance value, hospitality and operational efficiency as they navigate a marketplace shaped by elevated expenses and increasingly cautious consumer behavior.