Consumer Dining Outlook Brightens as Operator Confidence Ebbs

Consumers grew slightly more upbeat about dining out in July, even as restaurant operators’ traffic and sales confidence eased back, according to Datassential’s latest Table Stakes Tracker report.

The share of consumers who cut back on dining out fell to 41% in July, down 8 points from June’s 12-month high. Looking ahead, just 34% now say they plan to dine out less often or stop entirely, down sharply from 48% in June, while 17% expect to increase their visits. 

To save money while eating out, 26% of consumers said they chose more affordable venues and 25% ordered cheaper menu items than usual, both down slightly from June.

Consumer financial sentiment improved alongside that shift. The share of consumers who said they are getting ahead financially rose to 10% from 7% previously, while those falling behind ticked down to 17%. 

Looking ahead, just 19% expect their financial situation to worsen in the next month, down from 26% in June, while 21% expect improvement, up from 17%. Inflation remained consumers’ top concern at 69%, essentially unchanged.

Restaurant operators, by contrast, tempered some of the confidence they had shown in recent months. About 70% described the previous month as profitable or very profitable, down from 74% in June. Fast casual operators led all segments at 85%, while C&U and K-12 trailed at 49% and 56%, respectively — likely tied in part to school breaks over the summer. 

Looking ahead, 44% of operators expect higher traffic, down 7 points from June, and 45% expect higher sales, down 6 points, both retreating from June’s multi-month highs.

Food costs remained operators’ top operational challenge, cited by 75%, followed by labor costs at 53%. Reducing monthly food costs rebounded as the top business priority,  rising 4 points to 47%, partially reversing a decline in the prior month.

Operators also increased their focus on customer satisfaction, up 4 points to 24%. To drive profitability, 32% of operators launched new menu items or LTOs in the past month, 27% focused on value, and 23% raised menu prices.