industry news

The National Restaurant Association has released its latest Monthly Economic Briefing, providing an overview of the economic trends shaping the restaurant industry. While challenges remain, the outlook points to cautious optimism as the industry continues to navigate evolving market conditions.

According to the U.S. Department of Energy, the average price of gasoline reached $4.35 per gallon for the week of October 5, up $1.42 since the end of February. At the same time, interest rates have continued to climb. The yield on the 10-year Treasury note—a key benchmark for mortgages, auto loans, and credit cards—rose to 5.31% on October 5, its highest level since May 2002. Not surprisingly, these pressures have weighed on consumer sentiment, with the Conference Board’s measure of consumer confidence falling to its lowest level since April 2014. Similarly, 39% of respondents in our Quarterly Consumer Insights survey reported that their personal financial situation had worsened over the past year.

Even so, consumer spending has remained remarkably resilient. Retail sales at restaurants increased for a fifth consecutive month in August, rising 1.2% and underscoring the continued strength of household demand. The September retail sales report will provide an important test of whether that momentum is being sustained, although consensus forecasts point to continued growth.

Inflation remains a central concern for financial markets. Bond yields have moved higher amid expectations that the Federal Reserve may need to tighten monetary policy further, with growing federal debt levels adding to upward pressure on rates. Following the Federal Reserve’s 25-basis-point rate increase in September, many economists anticipate additional increases in the federal funds rate, including the possibility of another hike at the December meeting.

According to a recent consumer survey conducted by the National Restaurant Association, roughly one in eight adults are currently taking some form of GLP-1 medication, and that is expected to rise significantly in the months and years ahead. However, the survey results point to a more nuanced reality. Consumers taking GLP-1 medications are more engaged with restaurants than those who are not.

With the U.S. Treasury ending penny production in 2025, some businesses may begin rounding cash transactions to the nearest nickel due to limited penny circulation.

Consumers present a mixed outlook: roughly two-thirds report feeling financially stable and restaurant engagement remains solid, even as broader sentiment softens. Financial pressures are mounting among younger and lower-income households, many of whom report spending beyond their means. In response, consumers are becoming more value-conscious, paring back add-ons and trading down to lower-cost options. This dynamic underscores a continued “K-shaped” environment, with higher-income and employed households driving much of the sector’s resilience.

The National Restaurant Association conducts research that identifies current and future restaurant industry trends, covering everything from menu trends to technology changes.

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