Consumers more likely to cut back on restaurant visits than trade down
People sit outdoors at the Petite Crevette Restaurant on June 05, 2021 in the Brooklyn borough of New York City.
During the Great Recession, consumers hunted for bargains, trading down to cheaper restaurants or picking the least expensive menu options.
But today, as inflation puts pressure on their wallets, consumers are more likely to cut back on their restaurant visits instead to preserve their budgets, according to a report from AlixPartners.
The cost of eating out has been rising for more than a year. In March, for the first time since inflation began accelerating in mid-2021, prices for meals eaten away from home rose faster than prices at grocery stores.
In April, prices for food away from home rose 8.6% compared with the year-earlier period, according to the Bureau of Labor Statistics. Prices for food at home climbed 7.1% during the same period.
In response, diners have been visiting restaurants less frequently. In April, traffic at restaurants open at least a year fell 3.5% compared with a year earlier, according to Black Box Intelligence data.
In a survey conducted by AlixPartners in December, 74% of respondents said they planned to reduce dining out. Just 39% said they would choose less expensive restaurants. Those surveyed could choose more than one option.
Back in January 2009, just 12% of respondents said they would eliminate or reduce visits to cut back on their restaurant spending.
"History would tell you that people just trade down but continue to eat out as much," said AlixPartners Managing Director Andrew Sharpee.
Source: CNBC
