Consumer spending in restaurants is expected to keep growing into 2026, despite ongoing challenges like inflation and changes in consumer habits. The National Restaurant Association projects that food service industry sales will reach $1.5 trillion in 2025, which suggests continued strength for restaurant operators.
However, the landscape is shifting beneath this headline growth. Consumers are becoming more selective about where and how often they dine out, with a focus on value and experience due to tighter household budgets.
One significant trend this year is the reversal between casual dining and quick-service restaurants (QSR). According to a report from PAR Tech, casual dining has started to see increased customer traffic while QSRs are experiencing a decline. This shift is attributed to rising prices at QSRs, narrowing the price gap between them and casual dining establishments. As a result, many consumers now see casual dining as offering better quality and value for only a slightly higher cost.
To stay competitive, fast-casual brands are emphasizing quality—highlighting ingredient sourcing and portion size—and using limited-time offers to create urgency among diners. In contrast, QSRs are focusing on affordability by introducing meal bundles and adjusting menu prices for budget-conscious customers.
Wholesale food costs have continued rising through 2025 according to the National Restaurant Association. Although labor shortages have eased somewhat, upcoming minimum wage increases in several states could put further pressure on menu pricing.
A recent Bank of America Institute report notes that expectations of higher inflation may lead households to tighten their spending even more. Restaurants are responding by streamlining menus: removing low-margin items, simplifying preparation processes to reduce waste and labor time, and adding premium sides or drinks as optional upgrades instead of raising base prices across the board. Companies able to balance competitive pricing with distinctive experiences may be best positioned for repeat business.
After three years of declining activity, mergers and acquisitions in the restaurant sector appear likely to rebound as capital costs ease and regulations become more favorable for deals. Public markets might also see renewed interest if one or more successful restaurant IPOs occur; such moves could pave the way for other brands with strong performance records.
At the same time, consolidation within banking—especially regional banks that serve many restaurants—poses risks if those institutions change strategies or exit the sector entirely. Restaurant operators are working closely with lenders while exploring relationships with larger financial institutions to ensure continued access to credit as conditions evolve.
Franchisees are increasingly diversifying their portfolios by investing in newer growth concepts such as 7 Brew, Dave’s Hot Chicken and Hawaiian Bros—a trend reported recently by Franchise Times. This movement could accelerate if established brands fail to attract both operators and customers through innovation or better pricing strategies.
Experience is gaining importance alongside price throughout franchised operations. “Give me value or give me vibes,” reflects today’s consumer priorities according to some observers in the sector. To succeed going forward, restaurants must present clear value propositions while adapting quickly—through updated menus featuring new items or targeted discounts; improved service culture; investments in ambiance such as lighting or seating; faster order handling; and accurate fulfillment.
The appetite for eating out remains solid but consumers’ standards have changed: selectivity now defines their choices. Operators who make value obvious through careful pricing strategies, balance attractive menus with profitability concerns, invest consistently in service culture/ambiance improvements—and maintain flexible access to financing—are most likely to thrive amid evolving market dynamics.
“Give me value or give me vibes,” is the latest decision filter among consumers.”
Aliya Willis is a Global Commercial Banking senior relationship manager at Bank of America Atlanta.
