- Dining out has entered a new era of higher costs: restaurant prices rose 4.1% in 2025, roughly double the pace of grocery inflation, reflecting five years of steady increases in food and labor costs that have climbed 35% each.
- Delivery is no longer the go-to for convenience — pickup orders grew 14% last year while delivery spending fell 12%, as fees and tips pushed delivery prices nearly 80% higher than pickup.
- Generational habits are diverging: Gen Z’s quick-service spending is down 19 percentage points in two years, while Gen X and baby boomers are dining out less often and focusing on deals.
The higher cost of dining out isn’t going anywhere. After years of steady increases, American diners are heading into 2026 with a new baseline already baked in. The adjustment isn’t coming; it’s already here.
December’s Consumer Price Index data shows just how persistent that pressure has become. Food away from home rose 4.1% over the past 12 months, while grocery prices climbed at roughly half that rate — a gap that puts added strain on every decision to dine out.
A new McKinsey report, “What U.S. Consumers Want From Restaurants in 2026,” confirms that value and pricing remain top of mind, but cost alone isn’t what’s driving diners away. Among consumers who said eating out “wasn’t worth the money,” the top complaints were food quality and portion size, with more than half citing each, according to the survey of roughly 900 U.S. consumers fielded in August 2025.
Delivery is losing ground
For years, delivery apps promised a simple trade: convenience for a fee. As those fees climbed, the math started to break down. Service charges, delivery costs, inflated menu prices, and tips. Now diners aren’t just cutting back on delivery, they’re stepping out of the system altogether.
Pickup orders grew 14% year over year, with customers spending about the same per visit. Delivery went the other direction: order totals fell 6%, and overall spending dropped 12%. Diners still want the food, but they’re just no longer willing to pay a premium to have it delivered.
The gap has gotten hard to ignore. A 2025 LendingTree study found that delivery now costs nearly 80% more than pickup, adding an average of $9.30 per order once all fees and tips are factored in. For the 40% of Americans who say they order delivery at least once a week, that surcharge adds up fast, and for many, the convenience no longer justifies the cost.
Gen Z is pulling back from quick-service
Gen Z’s spending at quick-service restaurants has dropped faster than any other generation, down 19 percentage points over the past two years. The shift is striking. Fast food and drive-throughs typically offer what this generation says it wants: affordable prices, customization, and the ability to order from their phones. These restaurants are still losing ground with the demographic that should be fueling their growth.
Gen Z isn’t cutting back across the board, though. They still favor sit-down restaurants over quick grab-and-go options entirely. If they’re going to leave the house, it’s going to be for something social, something that feels like more than a transaction.
Older diners are tightening their wallets
For Gen X and baby boomers, the decision around dining out has shifted. These are the generations that have dialed back eating out the most — not just ordering less, but rethinking when a restaurant meal is worth it. Low- and middle-income households in these groups have cut back hardest, whether that’s ordering in, picking up, or sitting down.
The hunt for value has become part of the routine. Among Gen X diners, 91% now say daily specials or limited-time offers matter when choosing where to eat, the highest share of any generation, according to the National Restaurant Association’s 2025 State of the Restaurant Industry report. They haven’t stopped going out. Every meal just has to earn its place.
For boomers, the split comes down to income. Those earning more still choose sit-down restaurants when they want to. Those who haven’t already started pulling back. Millennials, by contrast, have been the most resistant to cutting back, though that may depend on how long prices stay this high.
The pressure isn’t only on diners. Over the past five years, food and labor costs for the average restaurant have each climbed 35%, according to the National Restaurant Association. Those increases leave little room for operators to absorb the hit. Menu prices have risen in response, but so has the risk of losing customers who no longer see the value. Diners are doing the math, and so are restaurants. Right now, neither side is coming out ahead.
