California diners are cutting back as costs soar — but restaurant owner reveals one trend that’s booming

Happy hour is becoming the main event for some California diners as the state’s high cost of living pushes more customers to seek out discounted meals instead of paying full price for a night out.

Chef Alex Carballo of Grand Restaurant Group told Fox News Digital that happy hour once accounted for an estimated 5% to 8% of his business. Now, that figure has climbed to nearly 30%, even as customers cut back on dining out.

“My happy hour has increased a lot, so I think people are looking for deals and looking for options,” Carballo said.

The shift reflects a broader affordability squeeze across California where residents told Fox News Digital that rising costs for housing, groceries and gasoline are forcing them to rethink everyday spending. 

California has the highest overall price levels in the nation, according to 2024 data from the U.S. Bureau of Economic Analysis, with prices running roughly 11% above the national average. But affordability pressures extend far beyond the Golden State, as Americans nationwide grapple with elevated costs for housing, groceries and other everyday necessities.

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Carballo said customers are visiting his restaurants less frequently, with some scaling back how often they eat out.

“They’re going out three times a week, where they were coming out to see me four or five [times]. And the people that used to see three times a week, they’re only coming out once,” he said.

What was once a stop for drinks or appetizers before dinner is increasingly becoming the dinner itself, Carballo said.

“Now it’s like, that’s where they’re going and they’re hitting those scenes,” he said.

Customers can still enjoy the same food, service and atmosphere at lower prices, Carballo said, making happy-hour deals particularly appealing.

But those discounts also create challenges for restaurant operators who are already grappling with rising expenses.

“I’m still paying the same amount for food. I’m still paying the employees. My rent didn’t change. Nothing changed. Only thing I’m doing is trying to discount my product to gain people to come here,” Carballo said.

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Fox News Digital also spoke with residents in Southern California who described making financial trade-offs that extend well beyond restaurants.

Jonas, a Santa Monica resident who is planning a wedding with his fiancée, said he and his fiancée are reevaluating their budget as everyday expenses continue to add up.

“Certainly gas is expensive, rent is high, and then grocery prices are pretty high as well,” Jonas said.

He estimated that he spends approximately $100 a week on groceries and said rising costs are influencing their decisions about dining out and transportation.

The couple is “eating out a little bit less,” Jonas said, adding that he has also started walking to work to “save money on gas as well.”

“I think that people are just seeing prices go up everywhere, and feeling like they’re getting less than what they had four years ago maybe,” he said. “I think everybody’s really feeling that.”

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For some Californians, the financial strain has gone beyond cutting back on restaurants.

Justin, a California native from Glendora who moved to Las Vegas seven years ago, told Fox News Digital that the state’s high cost of living was one of the reasons he left.

“Affordability is crazy,” Justin said while visiting Los Angeles for a Rams game.

“I left seven years ago and I thought gas and you know rent was high then,” he said. “Here I am seven years later and it’s … one of the reasons why I’m in Vegas now. It’s just unaffordable.”

Justin said many of his friends who remain in California are still struggling with housing costs.

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“90% of my friends are living with a roommate. It is really hard to live alone here,” he said.

Housing remains another major affordability challenge in the Golden State. Just 19% of California households could afford the state’s median-priced home of $916,750 in the second quarter of 2026, according to the California Association of Realtors.

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In Venice, resident Tatiana described rising expenses across everything from gasoline to groceries and neighborhood restaurants.

“Everything is more expensive, gas is more expensive, food,” she told Fox News Digital. “There’s really very few affordable restaurants left on Abbot Kinney. Even our local co-op prices have gone up at least 15%. Everything costs more.”

“We’re not getting any breaks in California,” she said.