Americans pull back from restaurants by most since 2023
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President Donald Trump's tariffs haven't yet led to higher US inflation, but they've prompted many Americans to rethink their spending. Some restaurants, particularly those that attract lower-income diners such as McDonald's Corp., have warned that consumer sentiment is shaky. Household finances have also worsened because of high interest rates and a persistent rise in the cost of living.
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Consumers regained some of their faith in the economy in May given modest inflation relief, but sentiment remains 'fragile,' according to Abigail Gilmartin, a retail analyst with Bloomberg Intelligence.
Red Lobster Chief Executive Officer Damola Adamolekun highlighted the concerns in an interview Monday, before the retail sales figures were released.
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'If sentiment drops, will it affect the restaurant business? Absolutely,' he said.
There's some optimism that potential tax cuts, which are part of a bill winding its way through Congress, could lift restaurant sales in the second half, according to Bloomberg Intelligence.
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