New research reveals that fewer people are dining out at fast food and casual restaurants this summer, opting instead for smaller, branded indulgences purchased from supermarkets. This shift reflects ongoing attempts by consumers to balance enjoyment with budget constraints in the face of persistent inflation in grocery prices.
Decline in Fast Food Visits Contrasts with Rise in Branded Grocery Purchases
According to consumer data from Worldpanel by Numerator, visits to casual and fast food restaurants fell by 6% in the three months leading up to mid-July 2025 compared with the same period last year. Despite this downturn in dining out, supermarket sales tell a different story: shoppers continued to favor branded grocery products over cheaper own-label alternatives.
Fraser McKevitt, head of retail and consumer insight at Worldpanel, explained the interconnected nature of consumersโ spending behaviors. โWhat people pay for their supermarket shopping often impacts their spending across other parts of the high street too, including their eating and drinking habits out of the home,โ he said. โCasual and fast service restaurants especially have seen a decline in visitors over the summer, with trips falling by 6% during the three months to mid-July 2025 โ compared with last year.โ
Interestingly, coffee shops experienced growth amidst the broader decline in casual dining, with visits increasing by 3% during the same period.
The Economics Behind Shifting Spending Patterns
The Worldpanel report highlights grocery price inflation as a key underlying factor. While inflation dipped slightly from 5.2% in July to 5.0% in August, the cost of essential grocery categories such as chocolate, fresh meat, and coffee continued to rise. Conversely, prices for champagne and pet food, notably dog food, declined.
โConsumers are still trying to make savings due to the high cost of everyday essentials,โ McKevitt noted. This financial pressure appears to be driving a subtle recalibration in how people reward themselves.
Sarah Coles, head of personal finance at Hargreaves Lansdown, offered further insight: โEating out is one of the first things to go when people want to cut back on spending. But there are more cost-effective ways to get the same reward, such as takeaway coffees or sweet treats from the supermarket.โ
She added that many consumers are โtrading upโ by choosing branded treats rather than own-label options, finding that branded items still provide a better perceived value relative to the price of dining out.
A Growing Market Segment
The distinction between branded and own-label products has become more pronounced. Sales of branded grocery items grew by 6.1% in August 2025, compared to a 4.1% increase for own-label alternativesโthe largest disparity since March 2024.
โThese branded sales were particularly dominant in personal care, confectionery, soft drinks and hot drinks categories,โ McKevitt said. He attributes this trend to consumers prioritizing items they perceive as higher quality or offering greater satisfaction during financially challenging times.
The lean away from fast food and casual restaurant visits toward supermarket treats also reflects broader societal shifts. Many households are seeking smaller, more frequent moments of enjoyment rather than full meals out, a trend that aligns with tighter household budgets amid ongoing economic uncertainty.
Inflationโs Lingering Impact on Consumer Behavior
The UK economy has faced sustained inflationary pressures throughout 2024 and into 2025, with grocery price rises being a particularly sensitive area for consumers. According to the Office for National Statistics, food prices increased by an average of 4.8% year-on-year as of mid-2025, while overall consumer price inflation hovered around 6%, a level significantly affecting household disposable incomes.
Industry analysts warn that high food prices could continue to influence consumer patterns for months or even years. Dr. Emma Hughes, an economist at the Resolution Foundation think tank, said, โThe combination of wage stagnation and high inflation means many households are forced to adjust their spending habits, prioritizing essential items and seeking value in discretionary purchases.โ
This economic environment explains why โsmall treatsโ from supermarkets that offer immediate gratification without the cost associated with eating out are gaining prominence.
Implications for the Food and Hospitality Sectors
The reported 6% drop in visits to casual and fast food restaurants poses challenges for these sectors, especially during summertime when dining out typically thrives. Many establishments are revising menus, offering promotional deals, or enhancing delivery and takeaway options to attract budget-conscious consumers.
Mike Cherry, chairman of the Federation of Small Businesses, commented, โThe hospitality sector continues to feel the squeeze from changing consumer behavior and cost pressures. Businesses that can adapt to evolving demandโby offering affordable quality and convenienceโare more likely to survive.โ
Conversely, supermarkets may see sustained growth in premium branded product lines as well as convenience items. This shift offers opportunities for retailers to cater to consumers seeking quality without the higher costs of dining out.
Will Trends Persist?
While the slight easing of grocery inflation offers some relief, ongoing geopolitical uncertainties, energy price volatility, and broader economic factors suggest caution. The Bank of England projects inflation returning towards its 2% target only by late 2026.
Consumer analyst Helen Shepherd from Kantar commented, โEven when inflation falls, it takes time for consumer confidence to rebuild fully. We expect many households to maintain cautious spending approaches, continuing to balance indulgence with affordability.โ
As such, the trend of substituting restaurant meals with smaller supermarket treats may continue in the medium term, reshaping consumption patterns in the food and hospitality markets.
Summary: Rising grocery prices and overall economic pressures have prompted UK consumers to cut back on fast and casual dining this summer, favoring smaller indulgences from supermarket branded products instead. While fast food visits dropped 6% over the past three months, coffee shop visits grew modestly. Industry experts attribute these shifts to changing consumer priorities amidst inflation, with lasting implications for retailers and restaurants alike.
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