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Gas Prices Take a Bite Out of Restaurant Sales
Rising fuel costs and economic pressures led to a decline in traffic at major US restaurant chains in March 2025.
As the national average gas price surged past $4.50 per gallon following the onset of the US-Iran conflict, consumers began pulling back on discretionary spending, with dining out being a primary casualty.
Industry data confirms the downturn. According to Black Box Intelligence, overall foot traffic across the restaurant industry fell 2.3% in March compared to the same period in 2024.
43% of drivers surveyed by Numerator said they have reduced dining out and takeout since gas prices began rising.
Corporate Reactions: "Softer Sales" and a "Slight Softening"
The trend was most pronounced among value-oriented diners.
"When gas prices exceed $3.50 per gallon, it affects that customer segment."
John Peyton, CEO of Dine Brands (parent company of Applebee's and IHOP), noted the company observed "softer sales" in March and April, directly attributing the slump to higher gas prices and broader economic conditions.
In response, Applebee's is launching a tactical promotion: an All-You-Can-Eat special priced at $15.99, starting Monday. The offer is aimed squarely at attracting budget-conscious customers.
Chipotle experienced a similar, if temporary, shock. CFO Adam Rymer stated the company saw a "slight softening in sales trends in March around the start of the Iran conflict." However, Chipotle reported that sales have since recovered, allowing the chain to post surprise same-store sales growth for its first quarter.
The Bigger Picture
The divergence in recovery between Applebee's and Chipotle suggests that while rising fuel costs create an immediate headwind for the entire industry, higher-end or faster-casual concepts may be more resilient than those relying heavily on a value-driven customer base.