Several American fast food chains including IHOP, Applebee’s, Sweetgreen, Wendy’s, Denny’s, and Chipotle have reported a significant decrease in dining-out frequency among consumers in the United States. More people are choosing to eat at home to save money, leading to a decline in sales.
IHOP and Applebee’s parent company, Dine Brands, as well as Sweetgreen, Wendy’s, and Denny’s, have warned investors this week that American consumers, concerned about economic slowdown and persistent price hikes, are weakening their willingness to spend, impacting sales. Chipotle issued a similar warning last month.
According to data from the market research firm Circana, in the first quarter of 2025, Americans dined out 1 billion times less compared to the same period last year. Since 2023, the ratio of eating at home versus dining out in the U.S. has remained relatively stable with no significant fluctuations.
McDonald’s CEO Chris Kempczinski noted that while McDonald’s saw sales growth in the previous quarter, he found that visits from low-income customers decreased by “double-digit percentages” from April to June, mainly due to a decline in their actual income. Kempczinski stated, “This is leading to people either skipping dining occasions, like skipping breakfast, choosing cheaper items from our menu, or simply opting to eat at home.”
Denny’s CEO Kelli Valade described the current consumer environment as “highly volatile,” attributing it to concerns about a slowing labor market and the impact of tariff policies on the economy, leading to a weakening consumer willingness to spend.
Due to a desire to save money, consumers are increasingly preferring home-cooked meals over dining out, prompting major food brands to introduce a range of discounted meal options, from Taco Bell’s “luxe cravings boxes” to McDonald’s $5 meal promotions, in an attempt to attract customers, with mixed results.
A report from market research firm Black Box Intelligence showed a 1% decrease in restaurant traffic in the U.S. this year compared to 2024, with fast-food chains being the most affected, experiencing a 2.3% decline in customer flow in the second quarter from the same period last year.
Restaurant market consultant Sally Lyons Wyatt attributed this to consumers currently having more debt and greater financial pressure, affecting their spending power. She doesn’t believe there will be a way to increase consumers’ spending on dining out this year. Wyatt stated, “Food and beverage is typically the last area of spending where consumers pull back, but we are now seeing a slowdown in those expenditures too.”
However, some restaurant operators remain optimistic, expecting foot traffic to rebound by the end of the year. Chipotle’s CEO stated that current sales are influenced by macroeconomic factors and consumer behavior, with low-income consumers currently favoring affordable options, but he anticipates an improvement in performance as consumer confidence improves.
On the other hand, many kitchenware brands are actively positioning themselves to capitalize on the trend of home cooking.
Scott Huckins, CEO of Reynolds Consumer Products, a manufacturer of aluminum foil and food storage bags, stated that their cooking products sales are rapidly growing, reflecting an increasing emphasis on the convenience of home cooking due to economic factors and lifestyle changes.