Americans Will Tip Like There’s No Tomorrow

We anxiously await our favorite dining spots to open back up. In our Harris survey, we found Americans fear losing their local mainstays and support price increases to keep them in business:  Americans are overwhelmingly (78%) concerned about local restaurants going out of business and it shows: (66%) support restaurants increasing prices to help recover losses as a result of the pandemic to help recover losses.

Most encouragingly, nearly a third are willing to pay (8%) surcharge to their tab and say it should apply to food and alcohol: Nearly three-quarters (72%) are willing to pay at least a surcharge of at least (1%) of their total bill, and 27% would be willing to pay as high as 8%. And a majority (54%) say the surcharge should apply to both food and alcohol!

What is the appropriate way for restaurants to raise prices? (41%) say notification before ordering that all menu items have increased in price, with (25%) suggesting an optional surcharge on the bill and (24%) encouraging higher than normal tips.

Who are the biggest tippers? Well, it turns out older Americans worry most about restaurants closing: (89%) of those 65+ say they are concerned vs (67%) Age 18-34. They also tend to be wealthier (80%) HHI $75k+ vs (73%) HHI <$50k and more right than left: (84%) Republicans vs (77%) Democrat. Similarly, support for surcharges is highest among seniors (71%) Age 65+ vs (61%) Age 18-34 and those more well off: (72%) HHI $75k+ vs (57%) HHI <$50k

This data reminds us of Panera’s experiment to pay what you can. Here perhaps credit card issuers could assign a line on the restaurant tab asking for a restaurant reopening tip on a sliding percentage of 1 to 10%. This would be not unlike a resort fee or state tax. Restaurants should capitalize on our collective goodwill and our cabin fever.