July 2024
Restaurants: Quantity is the new quality
Consumers are starting to trade down to value restaurants as they face rising costs and increased financial obligations.
Key takeaways
- Bank of America internal card data suggests that a higher number of customers are choosing more convenient and less expensive dining options as consumers face rising prices and financial obligations. According to Bank of America internal data, transactions at limited-service restaurants (LSRs) are up 10% compared to pre-pandemic levels and have been growing faster than full-service restaurants (FSRs) since fall 2023.
- For six years, customers pivoted the majority of their restaurant spending to standard tier restaurants, taking market share from both premium and value tier restaurants, according to Bank of America internal data. But this trend has reversed since fall 2023, as the market share of value tier restaurants has increased, while that of premium fell and standard flattened.
- And this trend is being driven by younger consumers, as they take on more financial obligations and face rising costs, with their market share of premium tier restaurants disproportionately low likely due to choosing quantity over quality.
Read our full analysis for a more in-depth look at these trends.
