The restaurant industry could be headed for an even greater funk this year, as more consumers opt to save their money rather than dine out.
Diners who typically eat at least twice weekly at a fast-food chain told AlixPartners, a New York-based consulting firm, that they plan to cut back on their restaurant visits by 8 percent over the next 12 months.
The news is even worse for fast-casual chains — think Chipotle Mexican Grill (CMG), Panera Bread (PNRA), and like — where diners who typically eat out at these places least twice weekly plan to cut back their visits by about 13 percent.
AlixPartners polled more than 1,000 U.S. consumers from Feb. 14-16, found that half of the respondents hoped to save money by eating out less. Some still wanted to spend, but not on dining; 32 percent said they would spend the money on travel and 31 percent planned to use that cash on "personal services" like hair or nail care, dry cleaning or housekeeping, among other things.
Baby Boomers, in particular, were more likely to ditch dining out to put away money for retirement. Millennials, on the other hand, are more inclined to spend their restaurant funds on other experiences, personal services or on their education or student loans.
Kurt Schnaubelt, a managing director at AlixPartners, said that having these two spending groups looking to deploy their money differently will be "painful" for the restaurant industry.
"Never doubt the frugality of the American consumer," he said.
While consumers tend to be aspirational in their goals for saving and spending, Schnaubelt said that "the American consumer has an incredible grasp on their spending habits."
Which could mean more trouble for
In January, Technomic analysts expected that sales at full-service restaurants would grow about 3.5 percent for 2016 and 2017. Adjusted for inflation, the real growth was estimated to be about 0.8 percent.
"The industry is fairly overbuilt," Schnaubelt told CNBC. "There are just too many seats. There are a lot of empty seats in the restaurant industry with a lot of capital put into those buildings and that equipment and they're just not getting the sales out of it."