As consumers continue to feel the impacts of years of economic challenges, those who are struggling the most continue to spend indulgently on restaurant dining.
By the Numbers
For PYMNTS’ report “New Reality Check: The Paycheck-to-Paycheck Report - The Nonessential Spending Deep Dive Edition,” created in collaboration with LendingClub, we surveyed more than 3,400 U.S. consumers in July about their spending on nonessential items and how these behaviors affect their ability to manage their budgets.
The findings showed that among financially struggling consumers — those who live paycheck to paycheck with issues paying bills — the most common splurge they cited is full-service dining. Specifically, 29.3% of consumers in this group reported that their spending on food from a table-service restaurant had been indulgent in the previous 30 days, a greater share than said the same of any other category.
Additionally, 27% stated that their spending on food from a quick-service restaurant (QSR) had been indulgent.
The Data in Context
Despite these self-reports, table-service restaurant brands are noticing consumers making cutbacks.
For instance, Applebee’s and IHOP owner Dine Brands, which has more than 1,700 restaurants around the world, noted on its most recent earnings call that it has seen consumers grow more conservative in their spending, both pulling back on visits overall and shifting to more budget-friendly channels.
“[We] saw them shifting a bit from delivery to pickup to save the delivery fees on off-prem … that suggests to us that the guest is becoming a bit more cost conscious, a bit more cautious in the last quarter,” Dine Brands CEO John Peyton said at the time.
Additionally, Darden Restaurants, which owns multiple popular full-service restaurant brands, including Olive Garden and LongHorn Steakhouse, shared on its most recent earnings call that it saw a year-over-year decline in traffic and a decrease in alcohol sales in its fine dining restaurants.
“The consumer seems pretty strong overall, … but one area we’re seeing a little bit of check management is with alcohol sales, primarily at our higher-end brands,” Darden President and CEO Rick Cardenas said at the time.
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