According to Bank of America credit card data, consumers, including lower-income and younger diners, are spending more at restaurants this summer. But they’re not spending it at chains, preferring to direct their spending toward regional concepts and independents.
It may be surprising that consumers are spending more at restaurants. It’s not surprising that they’d first spend it at independents.
As we’d written before, and covered in a recent episode of the A Deeper Dive podcast featuring Sysco CEO Kevin Hourican, independents are performing better than chains. “Mom-and-pop restaurants are performing better than national chains at large,” Hourican said. “That doesn’t mean there aren’t national chains that are doing great. I’m talking about, in the span of averages, local restaurants are doing better at this time.”
National chain performance has very much been hit or miss, but in general sales have not kept pace with inflation. For every Chili’s and Texas Roadhouse that are pulling in a lot of customers, there are Wendy’s and Sweetgreen that are losing them. The average American visits a chain restaurant about 9% fewer times every year than they did in 2021.
Consumers as a rule prefer independent restaurants. Two-thirds of them tell Technomic that they prefer dining at locally-owned restaurants when given the choice.
The problems with independent restaurants tend to be circumstantial. The industry is competitive and difficult. Profit margins are thin, at best. If a restaurant has a problem, a chain can float that problem for a while using profits from another location. An independent has to survive on that one location.
But local restaurants can be more innovative and nimble, and when those problems come up, they can make changes that ensure their survival. And they have the backing of that consumer preference.
That advantage has grown in recent years and will likely keep growing in the future, given the state of chains right now.
For one thing, as menu prices have increased, more consumers are questioning the value they get from chain restaurants, and they are opting for independents instead. If you’re going to spend more, after all, you may as well spend it at a place you prefer.
At the same time, consumers want experiences when they visit restaurants. Yet many chains are still focused on turning their restaurants into tech-fueled manufacturing plants that provide prepared food from people who don’t stay long, if at all.
The percentage of consumers who are dining in has been increasing steadily, albeit slowly, over the past few years. According to Technomic, 52.8% of visits were in the restaurant in the second quarter, compared with 51.5% a year ago. That remains well below the 60% from before the pandemic, and it may never return to that level.
Those dine-in occasions give independents an advantage, because it’s less about convenience and more about experience. Many fast-food chains have abandoned dine-in as an experience, relying on kiosks to take inside orders while much of the staff balances the needs of multiple ordering channels.
Many full-service chains, meanwhile, have burdened themselves with enormous debt levels or they franchised roughly everything, leaving them little room to provide the types of investments required to win in an environment like this.
The median casual-dining chain grew sales just 0.1% in 2025. But much of that problem was driven by chains at the bottom, including concepts like TGI Friday’s, On the Border, Pinstripes, Razzoo’s, Bar Louie, Brio Tuscan Grille and others that have bankruptcies and mass closures in their histories.
And both fast-food and casual-dining chains rely heavily on franchising, where the store operations rules are more restrictive and where it’s more difficult to recover from sales problems.
Franchises also frequently throw away one of the key advantages of scale, by accepting rebates from vendors that in turn charge higher prices for food, technology, and other items. So they don’t have the ability to lower prices as many people think, because their food costs are actually more expensive than the items independents purchase.
All of which means that chains have made themselves less competitive in recent years, and independents are primed to keep taking advantage. If they can stay open, that is.