Restaurants: Restaurant traffic stalled in 2024, but diner spending rose 2%
- InsightTrendsWorld
- Apr 19
- 9 min read
Why it is the topic trending:
Restaurant Industry Performance in 2024: The article discusses the state of the US restaurant industry in 2024 based on a report by Circana, a market research firm.
Stalled Traffic but Increased Spending: It highlights the interesting dynamic of restaurant traffic remaining flat while diner spending increased.
Performance of Major Chains: The article focuses on the flat spending growth experienced by some of the largest restaurant chains like McDonald's, Starbucks, and Burger King.
Growth of Smaller Chains: It also notes the significant growth in consumer spending for smaller and emerging restaurant chains.
Impact of Value Offerings: The report analyzes the role of value deals and their impact on driving traffic to restaurants.
Overview: The article reports on Circana's 2025 Definitive U.S. Restaurant Ranking Report, which revealed that while restaurant traffic was stalled in 2024, consumer spending increased by 2%. This equates to $1 million spent at restaurants every minute. The report noted that while major chains like McDonald's, Starbucks, and Burger King experienced flat spending growth, this was considered a positive outcome given the current macroeconomic environment, with Circana stating that "flat is the new up." Smaller chains, including Dutch Bros, Raising Cane's, and Wingstop, saw significant increases in consumer spending. The article also discusses the impact of value offerings on driving customer traffic and highlights that value is not solely about price point but also encompasses quality, craveability, service, experience, and convenience.
Detailed findings:
Consumer spending at US restaurants rose 2% in 2024.
Restaurants within the top 50 chains each capture over $1.35 billion in annual consumer spending.
The top 50 chains represent 61% of the entire restaurant industry spending but only 24% of all locations.
Major chains like McDonald's, Starbucks, Dairy Queen, Burger King, and Cracker Barrel had flat spending growth in 2024.
Smaller chains like Dutch Bros, Raising Cane's, and Wingstop saw increases in consumer spending of 26%, 31%, and 41%, respectively.
Value deals generally drove traffic up more than 5%, while traffic was typically negative without meal deals.
Consumers' perception of value and satisfaction with value per price paid increased towards the end of 2024.
McDonald's has a very high annual buyer penetration at 86%.
Dutch Bros joined the top 50 list for the first time.
There are a few key reasons why restaurant traffic might be stalling while spending is rising at dinner daypart:
Inflation and Menu Price Increases: Even if the number of people visiting restaurants isn't increasing, the cost of food and beverages has likely gone up, leading to higher overall spending when people do dine out.
Emphasis on Value Beyond Price: While traffic might not be growing, consumers are still choosing to spend more when they do go out to eat. This suggests they are prioritizing factors beyond just the cheapest option. They are willing to pay more for quality food, craveable indulgences they can't easily make at home, better customer service, a good overall experience, and the convenience of not cooking.
Smaller Chains Driving Spending: While major chains with high traffic might see flat spending growth, smaller and emerging chains are experiencing significant increases in consumer spending. This could indicate that while overall traffic is flat, the spending is shifting towards establishments where consumers perceive better value or a more desirable experience, even if they are not necessarily more frequent visits.
Impact of Value Deals: The article mentions that value deals drive traffic up. The absence of such deals might lead to stagnant traffic, but those who do visit may still spend more on regular-priced items.
Convenience and Accessibility of Major Chains: Large chains like McDonald's have high buyer penetration due to their widespread presence and convenience. This means a lot of people visit them at least once a year, but not necessarily more frequently, contributing to flat overall traffic while individual spending on those occasions could still be rising.
Generally, dinner checks tend to be higher than lunch checks for several reasons:
More Courses: People are more likely to order multiple courses (appetizers, entrees, desserts) during dinner than at lunch.
Higher Priced Entrees: Dinner menus often feature more elaborate and higher-priced entrees.
Beverage Choices: Alcoholic beverages are more commonly ordered at dinner, which significantly increases the total bill.
Longer Dining Experience: Dinners are often more leisurely, leading to more items ordered over a longer period.
Despite stagnant traffic in 2024, the 2% increase in restaurant spending likely reflects a combination of factors. These include menu price increases due to inflation, a consumer focus on value beyond just price (leading to higher spending on quality or experience), and potentially a shift towards dining occasions like dinner where spending is typically higher per person, even if the overall number of visits didn't increase.
Key takeaway: In 2024, US restaurant traffic remained flat, but consumer spending increased by 2%, with major chains experiencing stagnant growth while smaller chains thrived, indicating that value offerings and non-price factors are becoming key differentiators for attracting and retaining customers in the current economic climate.
Main trend: The Diverging Performance of Restaurant Chains in a Flat Traffic Environment
Description of the trend (please name it): Restaurant Resilience: The Tale of Two Tiers. This trend describes the contrasting performance within the US restaurant industry in 2024, where overall traffic remained stagnant, but larger, established chains experienced flat spending growth, while smaller, often newer or rapidly expanding chains demonstrated significant increases in consumer spending. This suggests a shift in consumer preferences or a greater ability of smaller players to adapt to current market demands and offer compelling value propositions.
What is consumer motivation: Consumers in 2024 were motivated to spend more at restaurants overall, likely due to factors like increased disposable income or a preference for dining out. However, their flat traffic suggests they weren't necessarily visiting more frequently. Their spending patterns also indicate a potential motivation to explore new or smaller chains that might offer better value, quality, or a more appealing experience compared to larger, more established brands.
What is driving trend:
Macroeconomic Conditions: Despite flat traffic, increased spending suggests consumers are willing to allocate funds to dining out, but they may be more selective about where they spend.
Value Perception: Consumers are increasingly focused on the value proposition, which extends beyond just price to include quality, craveability, service, experience, and convenience.
Agility of Smaller Chains: Smaller and newer chains may be more agile in adapting to changing consumer preferences and offering innovative menus, experiences, or value deals.
Brand Loyalty and Exploration: While major chains have high penetration, consumers might be exploring newer options or brands that better align with their evolving tastes and preferences.
What is motivation beyond the trend: The convenience of not cooking at home and the social aspect of dining out continue to be fundamental motivations for restaurant visits.
Description of consumers article is referring to (what is their age?, what is their gender? What is their income? What is their lifestyle): The article refers to US consumers who dine out. While it doesn't provide specific demographic breakdowns, the mention of value offerings suggests a broad appeal across various age groups and income levels. The fact that major chains still have high penetration indicates they cater to a wide demographic. However, the growth of smaller chains might point to specific segments, potentially younger consumers or those seeking novel experiences, being more willing to try new options. Their lifestyle involves incorporating restaurant dining into their food consumption habits.
Conclusions: In 2024, the US restaurant industry experienced flat traffic but increased spending, with a clear divergence in performance between large, established chains and smaller, growing ones, highlighting the importance of value and adaptability in the current market.
Implications for brands:
Large Restaurant Chains: Need to focus on enhancing their value proposition beyond just price, considering quality, craveability, experience, and convenience to drive growth.
Smaller Restaurant Chains: Have an opportunity to capitalize on their agility and potentially offer unique value propositions to attract consumers.
Implication for society: The trends in restaurant spending and traffic can reflect broader economic conditions and consumer behavior patterns related to discretionary spending.
Implications for consumers: Consumers have a wide array of dining options, with potential for more value-focused offerings and new experiences from smaller, growing chains.
Implication for Future: "Restaurant Resilience: The Tale of Two Tiers" suggests that the US restaurant landscape will continue to see a dynamic interplay between established giants and emerging players, with value and experience being key factors for success.
Consumer Trend (name, detailed description): The Value-Seeking Restaurant Explorer. This trend describes consumers who, while still willing to spend on dining out, are increasingly discerning about where they spend their money, actively seeking restaurants that offer a strong overall value proposition encompassing not just price but also food quality, craveability, customer service, experience, and convenience.
Consumer Sub Trend (name, detailed description): The Emerging Chain Enthusiast: A segment of the Value-Seeking Restaurant Explorer who is particularly drawn to trying out newer or rapidly growing restaurant chains that may offer a fresh perspective, unique menu items, or a different kind of dining experience compared to established giants.
Big Social Trend (name, detailed description): The Evolution of the Dining Out Experience: Consumers' expectations for dining out are constantly evolving, encompassing factors beyond just the food itself.
Worldwide Social Trend (name, detailed description): The restaurant industry globally is often a reflection of local economic conditions and consumer preferences for convenience, value, and experience.
Social Drive (name, detailed description): The Desire for Satisfying and Worthwhile Dining Experiences: Consumers want to feel that their money spent on eating out is providing them with good value in terms of food, service, and overall satisfaction.
Learnings for brands to use in 2025 (bullets, detailed description):
Overall consumer spending at restaurants increased in 2024 despite flat traffic.
Major chains experienced flat spending growth.
Smaller chains saw significant increases in consumer spending.
Value offerings drive traffic.
Value is not just about price but includes quality, craveability, service, experience, and convenience.
Strategy Recommendations for brands to follow in 2025 (bullets, detail description):
Large restaurant chains should focus on enhancing the overall value proposition for their customers, considering factors beyond just low prices.
All restaurant chains should actively consider offering compelling value deals to drive traffic.
Smaller and emerging chains should continue to focus on what makes them unique and appealing to attract consumers looking for new experiences and potentially better value.
Final sentence (key concept) describing main trend from article: "Restaurant Resilience: The Tale of Two Tiers" highlights the diverging performance of large and small restaurant chains in 2024 amidst flat traffic but increased spending, emphasizing the critical role of value and adaptability in the industry.
What brands & companies should do in 2025 to benefit from trend and how to do it: In 2025, restaurant chains should capitalize on "Restaurant Resilience: The Tale of Two Tiers" trend by:
Major chains should reinvest in enhancing their overall value proposition, focusing on improving food quality, service, customer experience, and menu innovation, rather than solely relying on price-based competition.
All chains should strategically develop and promote compelling value meal deals and limited-time offers that effectively drive customer traffic and increase perception of affordability.
Smaller and emerging chains should continue to leverage their unique strengths, such as innovative menus, exceptional service, or niche market appeal, to attract and retain customers seeking alternatives to larger, more established brands.
Final note:
Core Trend: Restaurant Resilience: The Tale of Two Tiers: Diverging performance of restaurant chains in a flat traffic environment.
Core Strategy: Enhance Overall Value Proposition and Offer Strategic Value Deals: Focusing on more than just price to attract customers.
Core Industry Trend: The Dynamic and Competitive Nature of the Restaurant Landscape: Established players facing pressure from agile, growing chains.
Core Consumer Motivation: Desire for Satisfying Dining Experiences that Offer Strong Value Beyond Just Price: Prioritizing quality, service, and overall satisfaction.
Final Conclusion: The 2024 restaurant industry data reveals a complex landscape where overall spending is up but traffic is flat, indicating that consumers are being more selective and are rewarding brands that offer a strong and comprehensive value proposition, particularly those smaller chains that are resonating with evolving consumer preferences.
Core Trend Detailed: Restaurant Resilience: The Tale of Two Tiers
Description: Restaurant Resilience: The Tale of Two Tiers trend describes the contrasting performance within the US restaurant industry in 2024, where overall traffic remained stagnant, but larger, established chains experienced flat spending growth, while smaller, often newer or rapidly expanding chains demonstrated significant increases in consumer spending. This suggests a shift in consumer preferences or a greater ability of smaller players to adapt to current market demands and offer compelling value propositions.
Key Characteristics of the Trend (summary): In 2024, the US restaurant industry saw flat traffic, but spending increased, with large chains showing stagnant growth and smaller chains thriving.
Market and Cultural Signals Supporting the Trend (summary): Circana's 2025 Definitive U.S. Restaurant Ranking Report showed a 2% increase in spending but flat traffic. Major chains like McDonald's and Starbucks had flat spending growth, while smaller chains like Dutch Bros and Raising Cane's saw significant increases.
How the Trend Is Changing Consumer Behavior (summary): Consumers are being more selective about where they dine, exploring smaller or newer chains that might offer better value, quality, or experience compared to larger, established brands, even while overall spending on restaurants is up.
Implications Across the Ecosystem (For Brands and CPGs, For Retailers, For Consumers, summary):
For Brands and CPGs: Large restaurant chains need to enhance their value proposition beyond price. Smaller chains have an opportunity to capitalize on agility and unique offerings.
For Retailers: The restaurant landscape will continue to see dynamic competition between large and small players.
For Consumers: Diners can expect a wide variety of options, with potential for more value-focused offerings and new experiences from emerging chains.
Strategic Forecast: "Restaurant Resilience: The Tale of Two Tiers" suggests that the US restaurant landscape will continue to see a dynamic interplay between established giants and emerging players, with value and experience being key factors for success.
Final Thought: "Restaurant Resilience: The Tale of Two Tiers" highlights the diverging performance of large and small restaurant chains in 2024 amidst flat traffic but increased spending, emphasizing the critical role of value and adaptability in the industry.
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