Americans dine out more this year as wage gains boost restaurant spending: BofA

Americans are dining out more frequently this year as easing restaurant inflation and stronger wage growth encourage consumers to spend on meals away from home, according to a Bank of America Institute report.

Restaurant spending rose 3.3% year-over-year in July, up from 1.8% growth a year earlier, while transactions increased 1.1%, according to the report compiled from Bank of America card transaction data.

Chicago, New York City and Los Angeles are the major U.S. metropolitan areas where restaurant spending growth was strongest, with all three outperforming the national average in July, according to the report.

Lower-income households are key drivers of the rebound, with their spending rising 4.1% in July from a year earlier, overtaking spending growth among middle- and higher-income consumers over the past two months. All three income groups recorded their strongest restaurant spending growth in nearly three years.

Younger consumers are also fueling the recovery. Gen Z spending increased by nearly 7% in July from a year earlier, almost double the pace of Millennials and well ahead of Gen X and Baby Boomers, according to the report.

Gen Z was the only generation to increase spending across all restaurant categories tracked by Bank of America. Spending growth at independent restaurants, local chains and regional operators is being favored more than large national chains across several restaurant segments, including quick-service, casual dining and fast-casual outlets, the report said.