Studies and surveys are being conducted on American consumer patterns regarding budget planning this summer. Consumers are inclined towards eating more at home rather than spending at restaurants. Pessimism about economic conditions and health concerns are the major reasons behind the shift.
Highlights
- It is anticipated that this summer is going to be challenging for the restaurant industry.
- Economic insecurity and other reasons can lead to fewer people eating at restaurants this summer.
- The shift in consumer budget allotment will have implications for society and businesses alike.
Consumers Shift to Home-Cooked Food Rather Than Restaurants
Seeing the trends of 2024 and 2025 about consumer sentiment and grocery sales, it is being deduced that this summer, consumers might change their budget allotment. Consumers are inclined towards less spending on eating at restaurants and more focus on cooking at home.
The survey report of April 2025 by the University of Michigan shows a decrease of 10.9% month-over-month in the Index of Consumer Sentiment. Unstable income and increasing unemployment can be the reasons for the same. A survey by KPMG also revealed that this summer, consumers might spend 7% less each month at restaurants.
There are more indicators of this prediction about consumers’ tight budgets on restaurant spending. Grocery sales have increased in recent times. This shows that people are investing more in buying groceries and cooking for themselves at home. This indicator is usually hit when the recession hits the economy.
Even the revenue from sales of frozen pizza was $6.5 billion in 2024 in the U.S. This, in contrast, led to lower revenues for pizzerias. Now, the shift towards home-cooked food will lead to low revenues in the restaurant industry as a whole. Not only this, but the forecast by Goldman Sachs Group Inc. about a reduction in foreign tourism in 2025 will also negatively impact the restaurants. 25% to 35% of the money spent by tourists at restaurants will now be a loss for the industry.
What Challenges Made Consumers’ Behavior Shift
Budget constraints and economic pessimism amid changing national and global dynamics have driven the consumer trends towards saving money and spending quality time with the family. People are also more concerned about food safety and health, which is making them lean towards fresh home-cooked food.
Nearly 50% of consumers are interested in eating more often at home this summer, while only 1% stated that they want to dine out more frequently. Of the considered population, 85% want to save money by eating at home. This also gives them control over the ingredients that they consume.
Apart from groceries and automotive expenses, the rest of the industries might experience less expenditure by consumers. This is because in tough financial times, people focus only on necessities and cost-cutting. As per KPMG, people are calibrating their budgets for conscious spending in the summer ahead. Spending at restaurants adds to the cost of living, and increased layoffs have led to this storm, with an expected recession in the near future.
The budget tightening for expenditure at restaurants has a positive impact in the way that it will aid in a healthy community with tightly knit families. But the reasons for this are not quite positive. This will lead to restaurants and other businesses face a challenging time. After an already tough 2024, this is the last thing that the restaurants had expected.
