California Diners Shift to Happy Hour Amid Soaring Costs

Rising costs across California are prompting diners to cut back on dining out and seek out discounted options, leading to a boom in happy hour business for restaurants. Chef Alex Carballo of Grand Restaurant Group told Fox News Digital that happy hour, once accounting for 5% to 8% of his business, now represents nearly 30%.

"My happy hour has increased a lot, so I think people are looking for deals and looking for options," Carballo said. This trend reflects a broader affordability squeeze affecting California residents, with high costs for housing, groceries, and gasoline forcing individuals to reevaluate their spending.

California leads the nation in overall price levels, with costs approximately 11% above the national average, according to U.S. Bureau of Economic Analysis data from 2024. However, these affordability pressures are not unique to California, as consumers nationwide grapple with elevated expenses.

Carballo noted that customers are visiting his establishments less frequently, with some reducing their dining out frequency. "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 explained. What was once an appetizer stop is now becoming the main dining event due to lower prices.

Despite the increased appeal of happy hour deals, restaurant operators face challenges. "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 stated.

Residents outside the restaurant industry are also making financial adjustments. Jonas, a Santa Monica resident planning a wedding, described reevaluating his budget due to rising expenses. "Certainly gas is expensive, rent is high, and then grocery prices are pretty high as well," he said, estimating $100 per week on groceries and walking to work to save on gas.

Another resident, Tatiana from Venice, noted increased costs for gas, groceries, and local restaurants. "Everything is more expensive, gas is more expensive, food," she said. "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."

Justin, who moved from California to Las Vegas seven years ago, cited affordability as a primary reason for his departure. "Affordability is crazy," he said, noting that even seven years ago, gas and rent were high, contributing to his decision to move. He added that many of his friends who remain in California struggle with housing costs, with most living with roommates due to the difficulty of affording housing alone.

Housing affordability remains a significant challenge in California. In the second quarter of 2026, only 19% of California households could afford the state's median-priced home of $916,750, according to the California Association of Realtors.