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Inflation reaches the dining table

The pressure of food inflation is increasingly visible in how Americans eat out. While the broader economy continues to show K-shaped characteristics, with higher-income households maintaining discretionary spending and lower-income consumers pulling back sharply, new data suggests that even those still dining at restaurants are becoming more cautious.

Rather than abandoning restaurants altogether, many diners are changing what they order. Smaller, lower-priced menu items are replacing full entrees, signaling a behavioral shift that restaurant operators and suppliers are now tracking closely.

Appetizers take center stage

Purchasing data from food service supply chain analytics firm Buyers Edge shows a clear move toward appetizers. Sales of popular starters to restaurant operators have risen sharply over the past year, even as demand for entrees and desserts has stalled or declined.

Appetizer orders are up roughly 20 percent year over year, while some individual items are growing at much faster rates. Mozzarella sticks have seen sales jump about 36 percent, pickle chips are up 35 percent, and cheese curds have increased by 33 percent. Jalapeño poppers and cheese bites have also posted double-digit growth.

Industry executives have started referring to this trend as the “appetizer economy,” reflecting how consumers are finding ways to enjoy dining out while spending less per visit.

Why smaller plates are winning

Affordability is the primary driver behind the shift. Appetizers are more frequently tied to promotions, happy-hour deals, and drink specials, making them an attractive option for budget-conscious diners. Consumers perceive these items as offering better value, especially when bundled with discounted beverages.

From the restaurant side, appetizers also make economic sense. Frozen and shelf-stable starters are among the fastest-growing categories, helping operators manage food costs, reduce waste, and respond more flexibly to unpredictable demand patterns. This allows restaurants to protect margins even as traffic patterns fluctuate.

Desserts and entrees lose momentum

While appetizers are gaining ground, other menu categories are losing steam. Dessert orders are down about 2 percent year over year, and higher-priced entrees are largely flat or declining. This reflects a broader trend of diners trimming non-essential add-ons and avoiding the most expensive items on the menu.

The behavior mirrors what is happening in grocery stores, where shoppers are increasingly trading down rather than trading out.

The K-shaped economy shows up in food spending

Food industry analysts say the divergence in consumer behavior aligns closely with income levels. Higher-income households continue to spend on premium and novel food products, while the majority of consumers are prioritizing value.

In grocery retail, this has fueled a strong shift toward private-label brands. Consumers can typically save 10 to 20 percent by choosing store brands over national labels, and perceptions of quality have improved significantly. Surveys show private labels are now viewed as comparable to national brands by many shoppers.

Major retailers are expanding their private-label offerings aggressively. Albertsons, Costco, and Kroger have all increased shelf space for in-house brands, while Amazon launched its Amazon Grocery private-label line with many items priced under $5. Some grocers believe private labels could eventually account for as much as 30 percent of total sales.

Food inflation remains stubborn

Although overall inflation has cooled from its 2022 peak, food prices continue to rise at a pace that consumers feel acutely. Food-at-home prices have been increasing in the range of roughly 2 percent to nearly 3 percent year over year, while the most recent consumer price data showed overall food prices up just over 3 percent.

Certain categories have risen even faster. Prices for meat, poultry, fish, and eggs climbed more than 5 percent over the past year. Dining out has been hit even harder, with food-away-from-home inflation running above food inflation overall. Full-service restaurant meals have seen price increases exceeding 4 percent.

Restaurants turn to private label and cost controls

Rising costs are pushing restaurants, universities, convenience stores, and institutional dining providers to adopt private-label ingredients and products of their own. The food-away-from-home industry, valued at roughly $1.5 trillion, is increasingly focused on cost containment as tariffs, supply chain disruptions, and labor shortages continue to weigh on margins.

Industry leaders caution that price relief will not come quickly. Food supply chains, especially for perishable items, adjust slowly. Factors such as droughts, feed costs, and production cycles for beef and poultry mean that supply constraints can take months or even years to normalize.

What this means for consumers

For now, the appetizer economy appears set to persist. Diners are still seeking social experiences and convenience, but they are doing so with tighter budgets and sharper value calculations. Smaller plates, shared starters, and promotional deals are becoming the new normal, reshaping menus and strategies across the restaurant industry.

As long as food inflation remains elevated and price pressures linger throughout the supply chain, both consumers and restaurants are likely to continue adapting rather than returning to pre-inflation spending habits.