At first glance, the numbers look encouraging:

• Comp sales trended upward in Q3, with June delivering the best results in 18 months.

• Traffic was still negative. However, it improved. Excluding weather/holiday anomalies, it’s now the strongest it’s been in two years.

But the strength isn’t evenly distributed:

• Casual dining is leading growth, buoyed by standout performance from major brands.

• Fast casual remains a consistent performer.

• Quick service is facing tougher comps and slight softness.

• Fine dining and upscale casual are recovering year-over-year but remain below peak levels.

Affordability is shaping the battlefield. Many guests are “trading down” from higher-priced experiences into fast casual or QSR. And, operators feel the pressure to keep price increases low after steep hikes in prior years. Value menus, shareable portions, and skipped beverages are all popular among consumers.

Headwinds:

• International tourism is down in certain markets. Particularly, Las Vegas was hit due to policy uncertainty and travel friction.

• Younger consumers are under financial strain. With student loan payments and credit card delinquencies climbing, it remains a challenge.

• Even higher-income households are increasingly living paycheck-to-paycheck.

Tailwinds:

• The Social Security Fairness Act created a one-time spending boost among retirees this spring.

• Lower gas prices this summer put extra dollars in household budgets. Thus, lifting traffic in experience-driven segments like family and casual dining.

The balance between these forces means the industry must remain nimble. Restauranturs must capture these tailwinds while prepping for potential financial pressure impacts.

Our guest intelligence data confirms one truth…

Perceived value is the most powerful driver of traffic right now.

Top-performing restaurants aren’t necessarily winning on food quality or service scores. They’re winning on value. That doesn’t just mean low prices. In fact, when guests complain about price, it’s often really about:

• Smaller portion sizes

• Inconsistent quality

• Poor taste relative to cost

When guests praise price, they highlight:

• Large portions

• High quality

• Great taste

• Atmosphere (full service) or speed (limited service)

The takeaway? Value is a holistic equation. Operators that align portion, quality, consistency, and overall experience with price expectations win loyalty. And, even more importantly, they garner repeat visits.

Alcohol’s share of sales is down 3% compared to pre-pandemic, driven by:

• Appetite-suppressing effects of GLP-1 medications like Ozempic

• Cost-conscious behavior (fewer drinks, trading down)

• Growth in mocktails and non-alcoholic options

But there are bright spots:

• Wine and specialty cocktails (especially margaritas) carry strong positive sentiment and can lift overall satisfaction scores.

• Tequila shows opportunity for improvement in perception and availability.

For operators, this means leaning into curated wine lists, well-executed cocktails, and creative non-alcoholic offerings to capture beverage revenue without alienating health-conscious or budget-conscious guests.

The labor picture continues to improve:

• Turnover is down across hourly and management roles. And the biggest gains? They’re in limited-service hourly positions.

• Wage growth has stabilized since mid-2023. Thus, operators have more predictability in labor cost forecasting.

At the same time, a generational shift is underway:

• 63% of all new hires in 2025 so far are Gen Z — 74% in full service.

• Employer branding, onboarding, and engagement strategies must reflect Gen Z values. From communication style to career growth opportunities, you must keep Gen Z in mind.

The second half of the year will likely continue this pattern:

• Solid comp sales headlines masking segment-by-segment variation.

• Guests staying active in the dining space — but highly selective and value-conscious.

• Operators balancing affordability with quality to defend share and build loyalty.

In a competitive, margin-sensitive market, the winners will be those who:

• Nail the price-to-value equation

• Adapt offerings to changing guest preferences

• Leverage workforce stability for service excellence