Restaurant Sales Slide As Americans Lose Appetite for Dining Out

American restaurant chains are seeing declining sales as consumers stay at home.

As the Financial Times (FT) reported Saturday (Aug. 9) IHOP and Applebee’s parent Dine Brands, Sweetgreen, Wendy’s and Denny’s all cautioned during earnings calls last week that consumers’ reluctance to spend is hindering sales.

U.S. diners ate 1 billion fewer restaurant meals between January and March of this year than during the same period in 2024, the report said, citing data from market research firm Circana.

This drop came after the number of meals eaten at home versus those eaten at restaurants has remained mostly consistent since 2023.

Meanwhile, McDonald’s CEO Chris Kempczinski said this week while sales at the fast food giant resumed their growth last quarter, visits from low-income customers in particular dropped by “double-digits” between April and June as their real incomes fell.

“The result of that is you’re seeing people either skip occasions, so they’re skipping . . . breakfast or they’re trading down either within our menu or they’re trading down to eating at home,” Kempczinski said.

According to the FT, visits to U.S. restaurants have dropped 1% this year versus, per market-research firm Black Box Intelligence. Worst hit are fast-food places, with their traffic declining 2.3% year over year in the second quarter.

“Right now we have highly-leveraged consumers,” said Sally Lyons Wyatt, a Circana adviser who studies the food service sector.

“It’s going to take a lot of levers being pulled in order to get consumers more comfortable to spend more money out of home. And it’s not going to be this year.”

Meanwhile, PYMNTS wrote last week about how this changing consumer environment is affecting the fast food sector. For example, McDonald’s reported that buying connected to its loyalty program came to around $9 billion in the quarter, part of roughly $33 billion in digital sales during the past year.

Consumers “are watching every dollar,” said Morningstar analyst Sean Dunlop. “They’ll still spend for convenience, but only if they feel they’re getting a deal.”

PYMNTS also wrote recently that while there is a prevailing sense of caution and gloominess in consumer mood, American household spending is proving to be resilient.

Earnings reports show that categories such as essentials and packaged goods are drawing their fair share of consumers’ monthly budgets.

“Back-to-school spending proved to be a standout among retail categories, while travel and luxury spending have seen headwinds,” that report added.