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Key Takeaways
- Bank of America analysts reported that consumers are eating out less, and relying more heavily on discount grocers to manage the rising cost of living.
- Executives reported that people are increasingly eating out at gas station meals and fast-casual restaurants.
- They're also buying smaller packages of food, according to Kenneth Casey Keller CEO of B&G Foods, the group behind Crisco and Green Giant.
The economy has changed the way Americans eat.
According to executives from a variety businesses, diners are moving away from traditional restaurants to fast casual ones and shopping at value supermarkets. Bank of America data released this week indicates that rising costs of living are prompting Americans to dine less out and look for grocery bargains.
Bank of America reported that discretionary spending such as vacations or restaurant visits has been declining for the past two years. According to Census Bureau data, sales at bars and restaurants fell 1.5% between January and February.
On recent earnings calls, executives stated that the restaurants have taken notice. Darden Restaurants (DRI), which owns Olive Garden and LongHorn Steakhouses, said that their casual concepts are now serving fewer households with incomes below $50,000 a year. Michael Spanos, CEO Bloomin Brands, parent company of Outback Steakhouse, Carrabba’s Italian Grill and Carrabba’s Italian Grill, said that diners are ordering less appetizers, drinks and desserts.
“We’re noticing some check management, particularly with those households [earning] Spanos, speaking on a earnings call last month according to a transcription from AlphaSense, said that the amount was “under about $100,000”.
Food sales at fast-casual spots and gas stations are on the rise
On a recent earnings conference call, CEO Brett Schulman stated that the push to save benefits Cava (CAVA), an upscale Mediterranean fast-casual chain. The company believes it is attracting customers who are cutting back on casual dining.
Cava welcomes “people trading down from a traditional casual dining experience to share a meal with us,” as well “trading up” from traditional [quick-service restaurants] Schulman added, “For $1 or $2 extra.”
Casey’s General Stores (CASY), a retailer of gas, snacks, and prepared foods such as pizza, is set to benefit from shoppers’ desire to spend less money on meals, CEO Darren Rebelez told investors on a call this month. Darren Rebelez said that once shoppers enter Casey’s they are eschewing candy due to the “high” prices. Instead, they are opting for baked goods.
Rebelez said the change was “a little cheaper and still allows for people to indulge in that sweet indulgence,” they were looking for.
Changes in Grocery Aisle Habits
The patterns of grocery shopping have also changed. Sprouts Farmers Market, where the majority of shoppers are higher-income, is expecting customers to respond to economic stress by eating in more and shopping at its stores less, said CFO Curtis Valentine at a recent conference.
Bank of America reports that many families are increasingly relying on value supermarkets. The bank reported that household spending on discount grocers rose by 1.2% in the period February 2024-2025, while premium supermarkets fell by 1.4%.
Shoppers are more frequently reaching for smaller package sizes, said Kenneth Casey Keller CEO of B&G Foods (BGS), the group behind Crisco, Green Giant and Cream of Wheat.
“We’ll look at: The smaller size in the portfolio, how can we highlight them for consumers who might be looking to trade-down?” He said this on a call to discuss earnings last month.
