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The Impact of Rising Food Costs on Customers’ Eating Habits

How rising food costs affect customers’ eating habits

If you’ve recently noticed that it’s much easier to get a table at your favorite restaurant, you may have just experienced another consequence of rising prices that have hurt the purchasing power of our money at gas stations and grocery stores. With inflation at a 40-year high, it should come as no surprise that the Harris Poll found that 90% of Americans are cautious about food prices, according to CNBC, and that caution is translating into fewer trips to restaurants.
According to Black Box Intelligence, casual dining restaurants such as Olive Garden, Applebee’s and Chili’s have seen a decline in customers due to higher prices. Between April and June of this year, 3% fewer people ate at these establishments compared to the same period last year. This suggests that rising food costs are affecting customers’ eating habits, leading to a shift away from eating out.

The impact of inflation on restaurant spending

While federal data reportedly showed an increase in monthly restaurant spending in May, surveys suggest that people are actually eating out less. The data contradicts expectations that inflation might cause people to buy fewer things and shift spending in favor of services and experiences. Kevin Gordon of Charles Schwab says, “Restaurant sales have eased, travel-related spending is weakening. The consumer is being squeezed – whether it’s because of inflation or other factors – and it’s happening across the income spectrum,” according to The Washington Post.
Data from restaurant booking system Open Table supports this trend, showing an 11% decline in restaurant bookings for a specific week in June compared to the same period in 2019. This suggests that diners’ reluctance to eat out isn’t just due to the ongoing pandemic, but is also influenced by rising food costs.

The financial burden on consumers

Fannie Mae Chief Economist Douglas Duncan echoes concerns about consumer financial strain. He notes that declining retail sales and rising credit card usage reflect this stress. However, he predicts that any decline in spending will be gradual rather than immediate.
Restaurants are taking steps to keep costs down in response to rising food prices. Forbes reports that many establishments are cutting back on menu items or using pre-made meals that require fewer people to prepare. Christine Davie Donahue of Buyers Edge Platform, which provides high-tech solutions to foodservice clients, explains, “Scratch cooking is something we admire and many operators aspire to, but it takes a lot of people. What we’re seeing right now is a shift to fewer people available to do the work.”

The impact on alcohol consumption

While customers may be cutting back on dining out, the impact on alcohol consumption is less clear. According to The Harris Poll, spending on alcohol has remained steady so far. However, Restaurant Business reports that 68% of respondents appear to be drinking less or at least buying less alcohol. This suggests that while some people are continuing to spend on alcohol, others are adjusting their habits in response to rising food costs.
Overall, rising food costs are having a significant impact on consumers’ eating habits. The combination of inflation and higher prices has led to a decline in restaurant visits and changes in consumer behavior. Restaurants are adapting by implementing cost-saving measures, but the challenges of rising food costs continue to impact both businesses and consumers.


Why do rising food costs affect customers’ eating habits?

Rising food costs make eating out more expensive, leading customers to reduce their restaurant visits and opt for more cost-effective alternatives.

Are all restaurants losing customers due to higher prices?

While casual dining restaurants have seen a decline in customers, it is important to note that the impact can vary across different types of restaurants.

How are restaurants coping with rising food costs?

Many restaurants are adopting strategies such as reducing menu items or using prepared meals that require fewer resources and labor to prepare.

Are customers spending less on alcohol as a result of rising food costs?

The impact on alcohol consumption is mixed. While some people may continue to spend on alcohol, a significant percentage appear to be drinking or buying less alcohol in response to higher food prices.

Is the decline in restaurant visits due solely to rising food costs?

The decline in restaurant visits is influenced by both rising food costs and other factors such as inflation and the overall financial strain on consumers.

Will rising food costs have an immediate impact on customers’ eating habits?

The impact is expected to be gradual rather than immediate as consumers adjust their spending habits and restaurants adjust their cost-cutting measures in response to the continued rise in food prices.

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