Gen Z is boosting restaurant traffic

Gen Z has seen the fastest increase in restaurant spending of any generational cohort in recent months. These positive shifts come despite considerable macroeconomic uncertainty, including fuel rate spikes caused by the Iran War.

While some chains have seen slipping traffic and other analyses of consumer health have been more pessimistic, this earnings season yielded some anecdotal evidence aligned with Bank of America’s findings. Cava, for instance, saw strong gains in traffic in lower-income trade areas as it held its pricing below the general rate of inflation.

Overall, “lower earners’ restaurant spending increased 4.1% YoY in July, the largest improvement over the past year compared to other income cohorts,” Bank of America found. Other leading chains in addition documented that traffic was an key element in their same-store turnover gains in recent months, indicating that menu rate hikes may not be the dominant factor in recent same-store turnover advance. “Higher prices are part of the picture, but the return to positive transaction growth suggests consumer engagement is improving too, with more consumers dining out and some consumers possibly dining out more often,” Bank of America found.

Independent restaurants are outperforming chains in terms of takings advance, and bars saw stronger turnover growth over the last several months than any other segment. While that may be an artifact of the 2026 FIFA World Cup resulting in more drinking occasions, it could in addition indicate that trends away from alcohol consumption have been exaggerated. Younger consumers, particularly those in Gen Z, account for a disproportionate increase in restaurant spending.

Gen Z spending spiked 7% year over year in July, “almost double the rate of [m]illennials, the next fastest-growing generation,” and has outpaced all other generational cohorts for several months running. “Gen Z are the only generation to have increased spending across all restaurant types,” going to the bank’s card data.

Of note, Gen Z spending at bars rose by between 9% and 12% over the last three months. Bank of America attributed this generational divergence in spending to faster after-tax wage advance, which benefits younger buyers who are more exposed to labor trade conditions.

Baby boomers, who are often entering retirement, have seen the slowest spending growth in recent months. Shoppers are shifting some of their grocery spending to restaurants relative to 2025, the bank found. This comes despite went up emphasis by grocers on foodservice and ready-to-eat food programs.

The report found that while menu quotations are still rising faster than grocery quotations, the rate of menu rate gains has slowed in recent months.