States with the most generous tippers despite inflation

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Americans are continuing to dole out big tips at restaurants even as the threat of high inflation hangs over the economy. 

According to aggregated restaurant sales data from software provider Toast's second-quarter Restaurant Trends report, the average same-store tip amount is up nearly 10% compared with last year, despite increases in the price of goods and services.

In the second quarter, quick-service restaurants saw an average tip of 16.9% and full-service restaurants saw an average tip of 19.6%. In-person diners dished out an average tip of 19.7%, while those who got delivery or takeout tipped an average of 14.5%.

TickerSecurityLastChangeChange %
TOSTTOAST INC.18.37-0.48-2.55%

As of June 30, Toast had approximately 68,000 restaurant locations on its platform.

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The data reveals that Indiana was the most generous state for tipping during the second quarter with an average tip of 21%, followed by West Virginia (20.8%) and Ohio, Delaware and Kentucky (20.7% each). 

Despite having one of the highest minimum cash wage laws for tipped employees in the nation, Californians were the least generous tippers, giving an average of 17.5%. Other states with the least generous tipping included Washington (18.3%), Florida and New York (18.5% each), and Hawaii, Texas and Nevada (18.8% each).

According to aggregated restaurant sales data from software provider Toast, the average same-store tip amount is up nearly 10% compared with last year, despite increases in the price of goods and services. (iStock / iStock)

Earlier this month, the Labor Department reported that consumer prices rose 8.5% year over year in July, cooling slightly but still near the highest level in 40 years. The cost of food away from home rose 7.6% year over year in July, according to the Bureau of Labor Statistics.

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Full-service restaurant sales during the quarter recovered to pre-pandemic levels, with gross merchandise volume up 18% on a same-store basis compared with the same period a year ago. Quick-service restaurant sales are nearly back to pre-pandemic levels with same-store sales up 17% during the quarter compared to a year ago. 

Sales for on-premise dining grew nearly 22% during the quarter compared with a year ago, while takeout and delivery grew approximately 6% year over year. 

Chinese food saw the largest year over year sales increase during the second quarter at 23%, followed by Thai and European food at 15%. (Toast)

Chinese food saw the largest year-over-year sales increase during the second quarter at 23%, followed by Thai and European food at 15%. Coffee sales climbed 14%, while breakfast, bakery and Japanese food sales tied with 12% year-over-year increases. Italian food rounded out the top-performing cuisines with an 11% year-over-year increase during the second quarter.

Seattle, Boston and the New York City metro area tied for the best-performing metro areas during the quarter with year-over-year sales growth of 24%. San Francisco and Washington, D.C., rounded out the top five with same-store sales growth of 20% year over year.

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