Stretch your dining dollars for the rest of 2026
Dining is getting increasingly expensive. I know this for two reasons: First, I watch the restaurant industry very closely and, second, this is what friends and family talk about every day!
Two of us went out to dinner last week, had one cocktail each, and the bill for the drinks was more than the entrees.
Spoiler alert: Even as prices continue to rise, causing us to spend slightly more dining dollars during this holiday season, we will be more judicious about where and how we spend. Here are some trends that industry analysts are noticing.
You will be spending differently
One of the ways that restaurant spending will increase is by the amount of gift cards guests will purchase. Because eating out is so costly, it is a real treat to dine at your favorite places. Gift cards are no longer “stocking stuffers,” but very coveted gifts.
Your dining dollars are precious, and you won’t be spending them at mediocre restaurants. You will looking for exceptional service. You won’t be going to restaurants, even ones that you like, if the music is too loud and you can’t hear the conversation or get to enjoy being with friends and family.
If your favorite restaurant has too many price increases, adds fees to your check, or is no longer a value, you won’t be frequenting them. They have moved on your list from regular dining to special occasion dining.
How you have been spending
We no longer get an appetizer for ourselves, but one that we share. We no longer order bottles of wine, but enjoy a glass instead. Because of extremely high prices, the days of two cocktails with dinner are just about over. Dessert and side order purchases are going down as well.
About 40% of diners are using discounts and promotions as the new measuring stick for going out. The good news for restaurants is that this will increase your spend, but the bad news is that their profits will take a hit.
Even if you want to go out as much or more than you did earlier in the year, a 36% (and growing) share of consumers are spending a great deal more time searching for less expensive options. Once you have found that place, it becomes one of your top dining options, pushing your old favorites off the list.
What this means for consumers
More upscale restaurants will be only for holiday celebrations or special group dining. We will be spending more money in fast-casual spaces because they offer value-oriented options. This means we can dine there more often because, without a lot of thought, we know we are getting our money’s worth.
What it means for restaurants
Restaurants will be fighting harder than ever to get your dining dollars. The best will be working hard to offer more perceived value. They will have to figure out how to increase check averages without increasing menu prices. Mid-level restaurants will have to do the same, but they can’t afford to rely on excessive discounting.
To sum up, restaurants will have to earn your business. Those that offer an exceptional experience and make you feel valued will do better, and you might even find a new favorite place to enjoy.
Izzy Kharasch is the founder of Hospitality Works, a consulting firm that has worked with more than 700 restaurants and small businesses nationwide. He is offering Daily Herald restaurant owners a free consultation by contacting him at Izzy@HospitalityWorks.com.