New research from Technomic unpacks the ‘new realities’ shaping industry trends amid a tough macroenvironment.

First quarter earnings reports are largely behind us and one of the big takeaways is that consumers are still very much struggling, if not worse off than they have been in recent quarters because of persistent inflation and, now, higher gas prices.

Technomic tried to unpack the state of the U.S. restaurant guest in a recent webinar, hosted by Senior Director of Consumer Insights Robert Byrne and Senior Vice President of Account Management Lauren Fredericks, and derived five consumer realities taking place right now.

The first reality is defined simply as “the economy and the overextended consumer.”

Consumers are bombarded with headlines showing that the economy (and the stock market) is actually growing, but most working families are now living paycheck to paycheck, and a growing number are also relying on debt to afford essentials. Indeed, credit card debt has reached an all-time high and more borrowers are falling behind on their payments.

This reality has hit consumer sentiment, which has plummeted to record low numbers in the past two months, according to University of Michigan data. Technomic’s research finds that two-thirds of consumers now report “shaky personal finances,” with 23% saying they’re struggling to make ends meet, while 45% report they are getting by but have to manage money very carefully. Just 24% say they are living fairly comfortably, while 8% of consumers believe they are “very well off.”

Perhaps it’s surprising then that restaurant frequency has picked up a little for households in the $50,000 to $75,000 annual income range, per Technomic. Forty-eight percent of that cohort reports visiting restaurants more than once a week, compared to 46% in 2023.

Fifty-five percent of consumers in the $75,000 to $100,000 household income cohort use restaurants more than once a week, versus 53% in 2023. Overall, the number is 48% now and 47% in 2023. Byrne said the slight uptick is because consumers are drawn to the social and entertaining experience restaurants provide.

Consumers are also increasing their restaurant usage because they perceive an improvement of food quality. Indeed, we’ve had several restaurant chains work to upgrade their core products. BJ’s Restaurants, for example, has a new pizza line that has generated 20% more sales than its previous pizza line. Chili’s is selling more than 160% more chicken sandwiches following its April upgrade of the product. Burger King also recently upgraded its Whopper, which contributed to strong sales momentum in the first quarter.

Consumers are also increasing their restaurant usage because more deals and specials are available, and because more items are available. Technomic has reported a record number of limited time offer launches for the past two years in a row.

Though frequency has picked up since 2023, traffic remains hard to come by. In April traffic remained down 0.8%, according to Revenue Management Solutions data. Unsurprisingly, consumers who have decreased their restaurant use cite high prices; 65% of consumers have pulled back on their restaurant usage because they perceive many prices to be too high, while 64% believe menu prices have increased, and 53% say their budget for ordering food service has decreased.

That said, Technomic data finds more customers are driven into restaurants because of taste and flavor versus value and lower prices. Byrne said this indicates that the definition of value has expanded: “Consumers enjoy all that foodservice has to offer, and even the most cash-strapped consumers see an everyday value that the entire food service experience offers.”

The number two reality for consumers is “maxxing and a new health frontier.” This is why we have seen an abundance of launches promoting protein, fiber and GLP-1-friendly menus. Byrne said “fibermaxxing” has become a bigger buzzword and has extended to beverages. Smoothie King, for instance, has launched a “Fibermaxxing Smoothie” with 16 grams of fiber.

“Protein maxxing” has brought us protein-specific menu launches from brands like Chipotle, El Pollo Loco and others, as well as launches like protein cold foam. Technomic finds that protein is the most sought-after health descriptor for consumers in the current environment, with 70% of consumers considering high protein to promote their overall health.

The proliferation of weight loss drugs has started to yield some business impacts, with 36% of users saying they eat “much less” than before.

The number three reality is “analog consumers living in a digital world.” Byrne said that digital is no longer providing the same serotonin hit it used to, and younger consumers, especially, are choosing to unplug, regardless of what they perceive might be the consequences of “missing out.” Younger consumers also increasingly believe that smartphones are “ruining society” and are seeking fulfillment over convenience while also looking for opportunities to feel more connected.

Some brands have leveraged this trend to push analog experiences in their marketing. IHOP, for example, recently celebrated National Pancake Day by inviting guests to meet up in person at participating locations for a free Short Stack. The promotion was supported by a “lo-fi” campaign complete with flyers. Further, a Chick-fil-A operator in Maryland is offering free ice cream to families who put their phones away during their meal.

Zooming in more on this trend, we are seeing digital demands peak with millennials and ease with Gen Zers.  New data from Talker Research finds that 63% of Gen Z sets aside screen-free time to “feel more present and productive.”

As such, we’ve seen an uptick in service being a bigger attribute than digital amenities when choosing a restaurant. In fact, service now matters more to diners than it did just two years ago.

The fourth reality outlined by Technomic is that “consumers can be boring.”

To wit, 29% of Gen Z consumers seek out new flavors, while 31% of millennials and 30% of Gen Xers do the same. Gen Z underindexes for bold and buttery flavors but express above average preferences for sweet, salty and fruity flavors.

Gen Z consumers also prefer traditional sweet flavors; 57%, for example, list vanilla as their tap coffee flavor profile. Byrne said this means that while new and exciting products have a place, routines are also important.

The final reality is that “legacy brands are living large.” We’ve seen consumers embrace nostalgia for brands like McDonaldland, Toyota, Nintendo and Polaroid, for example, and Technomic data shows that nostalgia-driven marketing can boost purchase intent by as much as 50%. This has helped in part drive Chili’s resurgence, while Chick-fil-A embraced the trend with its comprehensive 80th anniversary “newstalgia” campaign.

Byrne said familiar names not only provide comfort and predictability in challenging times, they also ensure consumers fully understand the value proposition inherent in the purchase. He said it’s important to ensure your menu promotes such familiarity, adding, “legacy quality never goes out of style.”