Toast Holiday Trends Report 2022: The Best and Worst Cities and States for Holiday Tipping, Takeout, Dine-In, and Gift Cards

Metro Detroit had the highest takeout percentage on New Year's Day, greater Indianapolis had the best holiday tips, and the Miami metropolitan area had the least generous tippers. 

BOSTON, MA – Toast (NYSE: TOST), the all-in-one digital platform built for restaurants, today announced its new Holiday Trends Report, providing visibility into the overall state of the restaurant industry during the end-of-year holiday season (Dec. 1 - Jan. 1) through aggregated sales data from restaurants on the Toast platform, which serves approximately 74,000 locations in the U.S. as of Sept. 30, 2022.

Toast also released its 2023 Restaurant Industry Outlook Report, which offers key learnings from the restaurant industry in 2022 and what operators expect to see in 2023. The report is compiled through Toast’s internal data analysis, secondary research, and a blinded survey conducted from May 13, 2022, to June 28, 2022, with a survey size of nearly 1,000 restaurant decision-makers, primarily SMB operators. 

Cities That Embraced the Holiday Spirit with Tipping

To gain insight into holiday tipping trends by city, Toast looked at the average tip percentage across transactions where a tip was added to the order via a credit card or digital payment from Dec. 17 through Dec. 31 in the 30 largest Metropolitan Statistical Areas in the United States.

Despite inflation and consumer surveys saying otherwise, Toast data shows guests are still tipping generously despite inflation. One observation suggested by Toast data is that some consumers tip more generously during the last two weeks of December.

While Indianapolis-Carmel, IN has the highest average tipping percentage, it also had the largest increase for holiday tipping, adding an extra .5% compared to the average tip percentage (21.0%) for the remainder of 2022.

Some cities, however, were not feeling the holiday spirit.

5 Most Generous Cities (MSA) for Holiday Tipping:

1. Indianapolis-Carmel, IN (21.5%)
2. Cleveland-Elyria-Mentor, OH (21%)
3. Pittsburgh, PA (20.7%)
4. Tampa-St. Petersburg-Clearwater, FL (20.5%)
5. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (20.2%)

5 Least Generous Cities (MSA) for Holiday Tipping:

1. Miami-Fort Lauderdale-Pompano Beach, FL (16.1%)
2. San Francisco-Oakland-Fremont, CA  (17.1%)
3. Sacramento-Arden-Arcade-Roseville, CA  (17.1%)
4. Los Angeles-Long Beach-Santa Ana, CA  (17.5%)
5. Houston-Sugar Land-Baytown, TX (18.0%)

Methodology: Toast looked at the average tip percentage across transactions where a tip was added to the order via a credit card or digital payment.

States Spreading Holiday Cheer with Big-Hearted Tips

Toast looked at the average tip percentage across transactions where a tip was added to the order via a credit card or digital payment from Dec. 17 through Dec. 31 for each state (and Washington D.C.) in the United States.

Though Delaware had the best average tip percentage for the last two weeks of the year, Maine increased its tipping average more than any other state, dishing out an extra .9% and averaging 20.8 when comparing the last two weeks of December with the average tip percentage (19.9%) for the first 11 months of 2022.

5 Most Generous States for Holiday Tipping:

1. Delaware (21.9%)
2. Indiana (21.2%)
3. Kentucky (21.1%)
4. Ohio (21.04%)
5. New Hampshire (21%)

5 Least Generous States for Holiday Tipping

1. California (17.6%)
2. Washington D.C. (17.9%)
3. Florida (18.2%)
4. Nevada (18.3%)
5. Washington (18.5%)

Dine-In or Takeout?

• On average, on-premise dining decreased by approximately 4% during the 2022 holiday season (Dec. 1 through Jan. 1) compared to the same period in 2019, before the COVID-19 pandemic.
• Demand remains for off-premise dining, increasing by approximately 3% during the 2022 holiday season compared to the holiday season in 2019, before the COVID-19 pandemic.
• On average, 73% (+1% YoY) of restaurant sales on Christmas Day 2022 were from on-premise dining, while 22%(-4% YoY) were from off-premise dining.
• On average, 82% (+4% YoY) of restaurant sales on New Year's Day 2023 were from on-premise dining, while 14%( -5% YoY) of sales were from off-premise dining.
  
  

Methodology: Toast analyzed aggregated sales data from restaurant locations on the Toast platform from Dec. 1, 2022, to Jan. 1, 2023.

New Year's Day On-Premise and Off-Premise Trends by City

To gain insight into dining trends on New Year's Day, Toast analyzed dining transactions in the 30 largest Metropolitan Statistical Areas in the United States to determine which cities had more on-premise or off-premise transactions.

5 Cities (MSA) with Highest On-Premise Dining Percentage on New Year's Day:

1. Tampa-St. Petersburg-Clearwater, FL (90%)
2. Nashville-Davidson-Murfreesboro-Franklin, TN (88%
3. Miami-Fort Lauderdale-Pompano Beach, FL (87%)
4. Orlando-Kissimmee, FL (86.1%)
5. Indianapolis-Carmel, IN  (86.0%)

5 Cities (MSA) with Highest Off-Premise Dining Percentage on New Year's Day:

1. Detroit-Warren-Livonia, MI (26%)
2. Sacramento-Arden-Arcade-Roseville, CA (22%)
3. Pittsburgh, PA (22%)
4. Los Angeles-Long Beach-Santa Ana, CA (21%)
5. San Francisco-Oakland-Fremont, CA (20%)

Methodology: Toast analyzed aggregated sales data from restaurant locations on the Toast platform from Dec. 1, 2022, to Jan. 1, 2023. 

The Gift of Gift Cards

• Gift card purchases surged in December 2022, averaging a 210% increase compared to average monthly purchases for the rest of the year. 
• So when do people cash out those gift cards? Gift cards are typically redeemed at a higher rate in the months of January and February.
• Gift Cards were redeemed 62% higher in January 2022 and 45% in February 2022 than the 2022 annual average.
• Gift Cards were redeemed 76 % higher in January 2021 and 50% higher in February 2021 than the 2021 annual average.

Methodology:  Toast analyzed all restaurant locations selling Gift Cards on the Toast platform to determine yearly and monthly averages when Gift Cards were sold and redeemed. 

The Holiday Trends Report, powered by Toast, uncovers key trends across the restaurant industry through aggregated sales data from restaurants on the Toast platform, which has approximately 74,000 locations as of Sept. 30, 2022. The Holiday Trends Report is not indicative of the operational performance of Toast or its reported financial metrics, including GMV growth and same-store GMV growth.