Rising gas prices are crushing restaurant sales as $4 a gallon becomes tipping point for consumers

Gas prices topping $4 a gallon drag down restaurant chain sales across the US | Fox Business
Fox Business
Personal Finance
Mortgages
Student Loans
Credit Cards
Personal Loans
Savings
Insurance
401k
Retirement
Tax Planning
Economy
Government Spending
Money & Policy
Small Business
Markets
Stocks
US Markets
Cryptocurrency
Futures & Commodities
Bonds
ETFs
Business Leaders
Industries
Retail
Pre-Markets
Mutual Funds
Watchlist
Lifestyle
Entertainment
Rich & Famous
Travel
Cars
Airplanes
Food & Drinks
Arts
Real Estate
Personal Real Estate
Commercial Real Estate
Luxury Properties
Tech
Digital
Social Media
Gadgets
Business Tech
Healthcare Tech
Future Tech
AI
Space
Video
Podcasts
More
Expand / Collapse search
Login
Watch TV
☰
Sports
NFL
NBA
MLB
NASCAR
Boxing
Soccer
Golf
Tennis
Opinion
Watch Live
Fox Business Shows
Programming Schedule
On Air Personalities
Full Episodes
Show Clips
News Clips
About
Channel Finder
Jobs
Terms of Use
Privacy Policy
FAQ
Media Relations
Corporate Information
Closed Captioning Policy
Accessibility Statement
Fox News
Fox Nation
Fox Business Go
Apps & Products
Facebook
Twitter
Instagram
YouTube
Flipboard
LinkedIn
RSS
Newsletter
Spotify
iHeartRadio
Fox Business
Terms of Use
Privacy Policy
Your Privacy Choices
Help
Closed Captioning Policy
Quotes displayed in real-time or delayed by at least 15 minutes. Market data provided by  Factset .
Powered and implemented by  FactSet Digital Solutions .
Legal Statement .
This material may not be published, broadcast, rewritten, or redistributed. ©2026 FOX News Network, LLC. All rights reserved. FAQ - New Privacy Policy
Recommended Videos
Left Arrow
Trump arrives in China for high-stakes summit as trade and tariffs take center stage
China needs Iran war to be over a lot more than US: KT McFarland
Coinbase CEO signals green light as Senate crypto bill nears critical vote
Kevin Warsh confirmation sets stage for Fed overhaul as CLARITY Act hits Capitol Hill
Former NYPD chief launches NYC mayoral bid, promises ‘truth’ over politics
Markets surge to record highs despite inflation spike and rising oil prices
Trump lands in China for high-stakes Xi summit as trade, Iran tensions loom
AI boom fuels massive hiring push for veterans as data center demand explodes
Rep Byron Donalds calls for ‘FREE Cuba’ as Trump signals possible talks
Bruce Blakeman: Mamdani can’t handle a Dairy Queen shift in the middle of winter
California needs Reaganomics, not a wealth tax, real estate CEO says
It will ‘take time’ for Kevin Warsh to cut interest rates, economist says
US ‘doesn’t need’ China’s help with Iran, former deputy national security advisor says
This is what credit card usage reveals about the consumer
Gulf nations are doing the right thing on Iran, Rep Rich McCormick says
NVIDIA to release earnings May 20 as stock lags behind AMD, Intel
Trump admin aims to combat rising gas prices
GOP weighs path forward for 2028 elections
China aspired to be a ‘geopolitical heavyweight,’ Roger Zakheim argues
Not very confident IEEPA tariffs will be repaid: Columbia Sportswear CEO
Right Arrow
Consumer
Published
May 4, 2026 4:46pm EDT
Rising gas prices are crushing restaurant sales as $4 a gallon becomes tipping point for consumers
Average gas prices have surged 41% in the last year amid the war in Iran, according to AAA data
Facebook
Twitter
Threads
Print
Email
Add Fox Business on Google
By Eric Revell FOXBusiness
close
video
We saw a ‘similar impact’ when gas prices reached these levels in 2022, says Wingstop CEO
Wingstop CEO Michael Skipworth discusses how soaring gas prices strain household budgets and the affects on Wingstops growth on ‘The Claman Countdown.’
Several U.S. restaurant chains are reporting weaker than expected sales growth in the latest quarter as high gasoline prices squeeze consumers' budgets.
Gas prices have surged amid the war in Iran, with average gas prices reaching $4.45 a gallon around the country, an increase of about 41% in the last year, according to AAA data.
Prices have risen even more dramatically in certain states, with gas prices in California topping $6 a gallon, which can weigh heavily on restaurants with a presence in the nation's most populous state.
An analysis by Revenue Management Solutions, a restaurant consulting firm, finds that $4 a gallon is a tipping point as consumers will gradually decrease their restaurant visits until gas prices at the pump hit that threshold, at which point the impact doubles.
DOJ CONFIRMS ANTITRUST PROBE OF MAJOR MEATPACKERS OVER BEEF PRICE INFLATION
Wingstop is one of the restaurants that has reported slowing sales amid the gas price surge.  (Bing Guan/Bloomberg via Getty Images)
The firm estimated that $4.20 average gas prices mean about 1.5% fewer restaurant visits, and if they rise to $5.10 or more, fast-food restaurants could see a 3% drop in traffic. Further, it estimated that for a drive-through restaurant with 300 daily transactions, a $1 spike loses about six customers per day and amounts to about $22,000 in lost annual sales.
Wingstop, a chicken-wing chain that touts its affordability, said that higher fuel prices contributed to an 8.7% decline in quarterly same-store sales.
The chain's CEO, Michael Skipworth, said Wednesday on a call with investors that it was "extremely difficult for anyone to predict this macro environment," adding that he expects shrinking sales over this year in part because of expectations that gas prices will remain high.
MCDONALD'S IS QUIETLY DITCHING A POPULAR IN-STORE FEATURE NATIONWIDE
Domino's said that its rivals are aggressively discounting to compete as consumers are strained by energy prices. (Beata Zawrzel/NurPhoto via Getty Images)
Domino's CEO Russell Weiner told investors on Tuesday that his chain's competitors ran promotions "out of our playbook," which contributed to the weaker than expected same-store sales growth of 0.9% in the latest quarter. Weiner added that while his chain is still better positioned than its rivals to sustain those discounts, the company lowered its sales forecasts for the year.
Some restaurant chains that performed well in the latest quarter are remaining cautious as they look ahead in their outlook. Chipotle had better than expected same-store sales growth of 0.5%, but kept an outlook of flat growth this year, which CFO Adam Rymer attributed in part to gas price uncertainty.
Starbucks reported 7.1% quarterly same-store sales growth in North America on Tuesday and may have benefited from the gloomy consumer outlook, as CEO Brian Niccol told investors the company gained among lower-income consumers who saw the chain as offering "a little bit of indulgence."
Ticker Security Last Change Change %
WING WINGSTOP INC 120.25 -3.48
-2.82%
DPZ DOMINO'S PIZZA INC. 309.10 -1.06
-0.34%
YUM YUM! BRANDS INC. 151.65 -1.23
-0.80%
XBUX NO DATA AVAILABLE - -
-
COSTCO CHANGES BELOVED $1.50 HOT DOG DEAL FOR THE FIRST TIME IN DECADES: REPORTS
Restaurants are also looking to meet consumer demand for affordable meals through value menu offerings. Taco Bell, a subsidiary of Yum Brands, launched a value menu starting at $3 in January and reported 8% quarterly same-store sales growth at U.S. restaurants.
Mark Wasilefsky, head of restaurant finance at TD Bank, said that the industry is "seeing a record level of value menus right now."
Investors' concerns about the restaurant sector's resiliency during the gas price spike has contributed to a 5% drop in the LSEG U.S. restaurant index since the start of the Iran war, which erased over $40 billion in market value, according to LSEG data.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The next key indicator of the impact of the Iran war and the gas price shock on the restaurant industry and its consumers will come on May 7 when McDonald's reports, after the chain had stronger sales growth than expected in the prior quarter amid a value menu push.
Reuters contributed to this report.
U.S. Stock Market Quotes
Advertisement
Arrives Weekly
Get Our Newsletter
Get a brief on the top…

Text scraped from the landing page for research purposes. © respective owners. This text is sourced from the advertiser's public landing page; for removal, contact dmca@luba.media.