Rising restaurant prices and economic concerns drive U.S. consumers to cut discretionary spending, including dining out.
McDonald’s CEO warned that many Americans are feeling financially strained as inflation remains elevated. The Consumer Price Index rose 3.3% annually in March, with food prices up 2.7%, but restaurant prices surged 3.8%—nearly double grocery inflation.
Discretionary spending, including dining out, has declined sharply since January. A March survey found 28% of Americans expect worsening finances by 2026, with 66% of that group planning to reduce restaurant visits. Broader spending trends also suggest prolonged caution.
Despite the challenges, McDonald’s reported stronger-than-expected Q1 earnings, with global sales up 3.8% year over year, indicating resilience in the sector.