While tariffs and their potential cost impact looms, March proved to be another value-driven arena for restaurants. In William Blair’s latest restaurant engagement tracker (catch up on the last one here) average monthly spending declined 14 percent, year-over-year, to $184. This owed to decreases across consumers with annual household incomes below $200,000 and was partly offset by increases among affluent diners.
The percent of respondents spending less than last year rose to 49 percent—a new survey high, primarily driven by weaker off-premises trends. Yet despite year-over-year drops, all brands under William Blair’s coverage zone experience sequential increases in consumers saying they were eating at them more often.
There’s a lot to unpack there, but the overall picture mirrored what’s surfaced throughout the past couple of years of inflation—restaurant engagement by consumers is mostly healthy: 91 percent of respondents in March said they eat at restaurants at least a few times a month (relative to 87 percent in December and 80 percent in the prior-year survey), with the percentage dining out at least a few times a week hiking to 57 percent (up from 50 percent last year). Nine percent said they eat out daily.
However, overall spending per household fell, year-over-year. And it’s a demographic jigsaw.
The percentage of respondents ordering food either a few times a week or daily was 62 percent for those under 60 compared to just 39 percent of people over 60. There was a clear correlation to income level, too—65 percent of respondents earning more than $100,000 said they ordered food a few times a week or daily. For those making less than $50,000, it was 50 percent.
This quarter, in-person was the most common form of interaction (average of roughly 3.4 days per month). It surpassed drive-thru (3.2 days), takeout (2.9 days), and delivery (2.4 days).
In total, respondents reported 11.8 interactions with restaurants per month, up 21 percent from March 2024. If the average number of days represents total interactions, it would indicate off-premises dining today accounts for roughly 72 percent of the pool.
Relative to pre-pandemic, about 56 percent of consumers said their frequency of ordering delivery and/or takeout has increased, including 22 percent noting a significant uptick. Twenty-four percent noted zero change and 20 percent said off-premises occasions decreased.
As for which brands emerged through this value haze, it appears, as William Blair said, most are improving perceptions as they pay closer attention to promotions and accessible entry points.
But there remains ground to cover. The percent of respondents “eating less often than last year” at specific restaurants outpaced those eating more often for just fewer than half of brands featured. The gap was most pronounced at Chipotle, The Cheesecake Factory, Starbucks, and Dave & Buster’s (in line with the previous survey). Still, all brands witnessed a sequential lift in eating more often, led by improvement at Cheesecake Factory, Dave & Buster’s, Starbucks, Chipotle, and Kura Sushi. So it feels as though the bottom dropped and is now sloping back, slowly but surely.
When asked why they were eating less often at specific restaurant brands, “too expensive” topped the list (cited nearly 50 percent of the time), followed by “lack of interesting new menu items” and “inconvenient.”
Consumers continued to rank the value proposition of this group of restaurants as modestly above average at 3.4 (out of 5). More than 60 percent posted improvement survey-to-survey, with the largest gains at CAVA, Dave & Buster’s, Dutch Bros, and Shake Shack. On an absolute basis, CAVA topped March’s list in value perception, followed by The Cheesecake Factory, BJ’s, El Pollo Loco, Dutch Bros, and Shake Shack. The previous list was led by Portillo’s.
To see CAVA atop the rankings isn’t overly stunning. Piper Sandler in February upgraded CAVA to an “overweight” rating given its ability to navigate the present choppy environment. Specifically, the brand took only about 15 percent menu pricing versus 2019 compared to 30 percent for much of its peer category. While not entirely responsible for its traffic gains, it “almost certainly helped,” analyst Brian Mullan wrote. The CPI hike since 2019 has been nearly 23 percent.
CAVA’s Q4 revenue increased 28.3 percent to $225.1 million on 77 net new openings and same-store sales growth of 21.2 percent. Of that, 15.6 percent owed to traffic—a figure difficult to rival in quick service.
CEO Brett Schulman said after the quarter CAVA underpriced inflation by 8 points as traditional fast-food quick service was upward into the mid-30s. So it’s not even half. The latest price adjustment of 1.87 percent was also under expected CPI for the year.
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“So working on behalf of our guests, investing in our guests, driving that value proposition, not just from a price point, but again, how we view value—that combination of factors, the quality of the ingredients we source, the relevance of Mediterranean cuisine, again, ranked the No. 1 diet, the convenience of the multichannel format that our guests can opt into their channel of choice on their terms and the experience we deliver,” Schulman said.
He also brought up CAVA’s ability to quantify value through “human connection.” Sixty-four percent of guests come in-store and want to engage with employees, Schulman said.
“And the ability for our team members to connect, deliver that Mediterranean hospitality while they’re having that experiential walk-the-line experience and smelling the food, tasting or seeing the food and hearing it cook, is powerful,” he added. “I think all of that comes together: that bang for the buck, to really be capturing whether it’s folks trading down from a legacy casual dining experience and sharing a meal in our dining room, like we’ve talked about the ‘Project Soul’ investments or trading up from traditional QSR for $1 or $2 more, sometimes at parity and then trading over from other players in the space that we’re clearly resonating with the modern consumer with what we’re able to deliver.”
Other ordering trends and evolutions
This quarter, the most prevalent ordering method by polled consumers across age groups was directly through a restaurant’s website or digital app (41 percent for takeout, up from 39 percent last survey) and 31 percent for delivery (down from 34 percent). This marked the second consecutive quarter digital channels outnumbered in-person and over-the-phone orders as the most popular method (used by roughly 33 percent of respondents for takeout and 25 percent for delivery). They were followed by third-party marketplaces, where usage was materially higher for delivery (35 percent of orders in March) than takeout (15 percent).
Breaking apart by age groups, if you exclude respondents over 60, the percentage ordering in-person or over the phone was 28 percent for takeout (down from 33 percent last quarter) and 20 percent for delivery (up from 15 percent).
When ordering delivery, respondents under 60 were more likely to order through a third-party aggregator (42 percent) or a restaurant’s website/app (30 percent). William Blair believes growing comfort with digital channels will ultimately power a mix shift toward digital ordering. It’s a reality already well underway.
For those consumers who said they ordered delivery or takeout, the most frequently selected reasons were convenience and time constraints. Sixty-eight percent tapped these as main factors. Preference not to cook (28 percent) followed.
As usual, William Blair also asked about perceptions of using QR codes over a mobile device for menu browsing, ordering, and payment, as well as in-store kiosks. While at a restaurant, 57 percent of respondents said they were comfortable using QR codes over a mobile device to order/pay, although a much lower 31 percent over the age of 60 felt the same. When asked about kiosks, 72 percent said they were comfortable navigating the menu, ordering, and paying for food through in-store models (higher than 70 percent last survey). Twenty-eight percent said they were not.
Although some respondents continue to express preference for physical menus and human interaction, respondents seem to be increasingly ready to leverage the functionality of these emerging ordering channels, William Blair’s study showed. If QR codes and/or kiosks continue to become more ubiquitous, it will represent another factor to support more restaurant order/payment volume flowing through digital channels, it said.
Last quarter, the company also added a new question on how diners felt about increasingly prevalent service charges and credit card surcharges being added to dine-in checks. About 68 percent said they find these fees unreasonable. However, just 27 percent said they’d avoid restaurants that administer them (down from 31 percent last quarter). Another 23 percent added these fees were small/reasonable, so they were unbothered, while 9 percent haven’t noticed them yet.
Switching to the topic of loyalty, roughly 71 percent of March respondents said they actively participate in them. That’s significantly above December’s 63 percent. William Blair found stronger participation, unsurprisingly, in younger demographics—76 percent under 60 versus 56 percent over.
When asked how much loyalty programs influence eating decisions, 71 percent said they were at least somewhat influential. That, too, is on the rise from 63 percent last quarter. Twenty-three percent said they were not an important lure. The proportion of respondents indicating loyalty programs do not influence restaurant choices, though, has continued to trend down over time.
More on spending trends
Among those aforementioned declines, it was spread across all cohorts under 60 with the greatest coming among those respondents 45 and under.
The percent spending less than last year rose to 49 percent, up seven points sequentially to reach a new survey watermark after remaining largely rangebound over the past two years. Again, it was a matter of off-premises occasions sliding offset by encouraging frequency movement and broader check management with “visiting less often” and “ordering fewer items” decreasing sequentially.
The survey was conducted mid-March and featured more than 500 total consumer responses.
