As economic headwinds persist, consumers across generations are adjusting their restaurant purchasing behaviors amid rising prices.
A December study by PYMTS surveyed over 2,300 consumers who regularly purchase food from restaurants. It found that 88 percent of millennials and Generation Z, 87 percent of (older) bridge millennials and 85 percent of Generation X consumers have reported changing spending habits.
According to the data, the cost of dining out rose 8.6 percent on average from October 2021 to October 2022, exceeding the 7.7 percent rise in the Consumer Price Index (CPI).
In response, consumers have cut back on how often they purchase from restaurants. Baby boomers mark the largest group to make cutbacks at about 40 percent, followed by 36 percent of Gen X, 28 percent of bridge millennials, 29 percent of Gen Z and 23 percent of millennials.
The study finds that while older consumers scale back on dining out altogether, younger generations are selecting lower-priced restaurants. Nineteen percent of millennials and 18 percent of Gen Z report they will take their business to less-expensive establishments. In contrast, only 12 percent of baby boomers report they’d do the same.
Consumers are also trading down in the menu, with 16 percent of millennials and bridge millennials, 12 percent of Gen X, 11 percent of Gen Z and 4.3 percent of baby boomers selecting cheaper items.
As such, it seems that older consumers are willing to cook at home more frequently, while younger consumers continue to prioritize convenience and experiences.
Overall, younger generations, like Gen Z, will be shaping the food service industry to come. Therefore, restaurants navigating the unprecedented pricing climate should consider generational spending habits when developing long-term strategies.