See also: NYC Food Trucks Reel Under Double Hit of Inflation, Remote Work

“We’re just starting to see people say, ‘Maybe I’ll choose the $35 bottle of wine instead of the $40 bottle of wine,” he said in an interview. “That will likely continue.”

Peabody, who is also the co-founder of Seated, a restaurant reservation app that offers rewards on meals, says the service’s average order was $88 in September, down from $91 last year at the same time. He’s also predicting a dropoff in diner visits for the coming months.

“I would be shocked if we don’t see some reduction in frequency. I’m preparing the team for it,” he said. “I’m worried about the industry.”

A closely-watched survey of services painted a similar picture. One respondent in the lodging and food-services industry said that a traditional dip in restaurant sales during the August-to-October period “seems to be more severe compared to before the pandemic,” with inflation and uncertainty being listed as the likely causes.

While the Commerce Department reported the total value of September retail sales at restaurants and bars rose by 0.5% from the prior month, the data isn’t adjusted for price changes. After adjusting for menu increases, the National Restaurant Association found sales declined, marking the third such drop in four months.

As inflation erodes spending power, the economic outlook is also increasingly grim. Many economists now expect a recession next year and higher unemployment. If this happens, Lusk predicts Americans will replace some restaurant spending with groceries, while also shifting to cheaper dining options like fast food.

Olive Garden owner Darden Restaurants Inc. sales missed Wall Street’s expectations in the quarter ended Aug. 28. The company, which has raised its prices, blamed inflation for lower spending, especially among those who earn less than $50,000 a year. 

September saw a higher number of consumers who slashed spending versus August, according to Cowen. Dining out and social events were the top expenditures being cut or expected to be cut. This outpaced other categories such as travel or groceries, according to the financial-service company’s monthly survey of 2,500 US consumers.

“When you have a very significant inflation, consumers may actually switch to cooking at home and preparing food at home, and that’s just the risk,” Domino’s Pizza Inc. Chief Financial Officer Sandeep Reddy said during a conference call on Oct. 13. “We are in unprecedented inflationary times.”