The ongoing high cost of living is reshaping the UK dining sector, with consumers increasingly prioritising convenience and affordability over traditional dining experiences, according to a new report from advertising platform Cardlytics.
The State of Spend: Dining Sector report, based on spending insights from over 23 million UK bank accounts, reveals how inflationary pressures and low consumer confidence have led to significant shifts in behaviour. While quick-service restaurants (QSRs) and delivery platforms have remained resilient, casual and upscale restaurants continue to face major challenges, with declining visits and revenue losses across early 2025.
Convenience reigns supreme: delivery platforms outperform the market
Delivery platforms have solidified their position as a dominant force in the sector, recording a 3% increase in revenue in early 2025, despite broader economic headwinds. However, while revenue growth has continued, the number of transactions consumers made on these platforms fell by 5%, suggesting that consumers are consolidating their spending, opting for fewer but larger orders to maximise value.
As delivery services refine their offerings with subscription models, bundled discounts, and loyalty incentives, restaurants must assess how they can collaborate with these platforms to maintain visibility and customer engagement. Investing in targeted promotions, cashback rewards, and strategic partnerships will be crucial for brands looking to remain competitive in an increasingly digital dining landscape.
Restaurants struggle as cautious consumers cut discretionary spending
The broader restaurant sector has faced a difficult period, with cost-conscious consumers reducing their dining-out habits. The report found that total revenue for restaurants has fallen by 4% so far in 2025, driven by an 11% decline in visitor numbers.
Casual dining and upscale restaurants were particularly impacted. upscale restaurants – having shown resilience over the last two years – saw visitor numbers fall by 10%, contributing to a 6% drop in revenue. Meanwhile, casual dining revenue saw revenue decline by 2% in early 2025, with transaction volumes and visitor numbers falling by 4%.
With inflation continuing to push up menu prices, restaurants must find innovative ways to attract diners. Dynamic pricing, off-peak incentives, and enhanced loyalty programmes could provide a lifeline for the sector, helping to encourage footfall and customer retention.
QSR sector shows resilience despite challenges
Quick-service restaurants (QSRs) demonstrated relative stability compared to other dining categories, despite a 5% decline in revenue. However, with total revenue still 0.3% above 2023 levels, the sector remains better positioned than traditional restaurants to weather economic pressures.
With consumer budgets stretched, value-driven propositions will be key to maintaining customer footfall. Promotions such as meal deals, bundled offers, and targeted digital discounts are likely to influence consumer decision-making. Additionally, investing in app-based loyalty programmes could help QSRs sustain engagement and encourage repeat visits in an increasingly competitive space.
Peter Tolkien, Senior Commercial Business Partner at Burger King, said: “Our customers are always looking for value – and that’s never been more important today with consumer confidence still low. Even with less disposable income, consumers still want to dine out – and with new and existing competitors vying for our market share – data informs our promotions strategy to help ensure they choose us.
“Understanding our customers’ evolving needs – and adapting to meet them – is critical. Competitive pricing remains important, but we know that providing targeted rewards and promotions is becoming an increasingly vital way to foster loyalty amongst our customers, which has helped keep them coming through the doors during tougher economic times.”
Chris Harris, partnerships director at Cardlytics, said: “The UK dining sector is undergoing fundamental shifts as economic pressures continue to shape consumer habits. Our data shows that convenience-driven services, such as delivery platforms, are thriving, while traditional restaurants must find new ways to attract and retain customers.
“In this climate, brands need to be proactive. A data-driven approach to marketing—through targeted cashback rewards, personalised promotions, and strategic partnerships—will be key to staying ahead of evolving consumer expectations. Those who can adapt to these changes will be best placed to navigate the ongoing challenges and emerge stronger in the long run.”
