People buying less fast food as grocery prices remain high

People are spending less on fast food this summer but are replacing those meals with smaller treats from the supermarket according to new consumer research.

Casual and fast-food restaurants have seen a 6% drop in customers over the three months to mid-July compared to last summer, research from Worldpanel by Numerator found.

But shoppers were still buying branded groceries instead of swapping for cheaper, own-brand alternatives.

Worldpanel said that grocery price inflation fell marginally from July to August, but consumers are still trying to make savings due to the high cost of everyday essentials.

Fraser McKevitt, head of retail and consumer insight at Worldpanel, said high grocery prices affect people’s spending habits in other areas, like dining out.

“What people pay for their supermarket shopping often impacts their spending across other parts of the high street too, including their eating and drinking habits out of the home,” he said.

“Casual and fast service restaurants especially have seen a decline in visitors over the summer, with trips falling by 6% during the three months to mid-July 2025 – compared with last year.”

But coffee shops bucked this trend, with visits up 3% over the same period.

Mr McKevitt said people were also “still seeking treats in store”.

Sales of branded grocery items grew by 6.1% in August, while sales of own-label alternatives were up by 4.1%. Worldpanel’s report found that was the largest gap in favour of brands since March 2024.

There has been a trend towards people opting for smaller, cheaper ways to treat themselves, according to Sarah Coles, the head of personal finance at Hargreaves Lansdown.

“Eating out is one of the first things to go” when people want to cut back on spending, she said.

But Ms Coles said there were “more cost effective ways to get the same reward,” such as takeaway coffees or sweet treats from the supermarket.

She added many were “trading up” to branded treats instead of opting for the own-brand version, because it was still cheaper than a meal out.

Branded sales were “particularly dominant” in personal care, confectionary, soft drinks and hot drinks categories, Mr McKevitt said.

The Worldpanel report found that grocery price inflation was 5% in August, down from 5.2% in July. The cost of chocolate, fresh meat and coffee rose fastest, while champagne and dog food saw the largest drops in price.