US consumers seek value as price pressures continue

By JP Frossard and Thomas Bailey, Rabobank Consumer Foods

Available to clients in the IRS Payments dashboard. Contact sales for details.

While traffic is down, average check sizes have continued to grow as high costs and spending behavior continue to adjust to economic pressures. In Q1, average check sizes increased by 3.5% compared to Q1 2023. This growth rate is below inflation for food away from home during the same period (4.6%). It indicates consumers are reducing the number of items purchased and/or picking cheaper options when ordering at restaurants. Menu prices continue to increase, despite overall inflation easing, especially for food at home, which contributes to reduced restaurant visits. 

An hourglass shape has emerged in the US consumer landscape, with lower-income groups reducing their restaurant visits and minimizing their spending the most. Darden Restaurants highlighted this increasing divergence in consumer demand based on income levels in its latest earnings report: “… transactions from households with incomes above USD 150,000 were higher than last year… transactions fell from incomes below USD 50,000.”