After a slowdown in the economy and a dip in consumer spending, there is expected to be a rise in retail and consumer spending this year. Inflation is cooling, and we have been promised a rate cut later in the year. An improvement in macroeconomic conditions means higher consumer spending. Once the interest rates come down, mortgages and auto loans will become cheaper, allowing consumers to make discretionary purchases. This will directly impact restaurant stocks.

The warm summer days will be here soon, there will be holidays from school and we will be eating out a lot more. Consumers have plenty to spend, and food remains one of the biggest expenses for all of us. As consumer spending improves, restaurant stocks are set to gain. If you are ready to make the most of increased consumer spending, now is the time to invest in these seven tasty restaurant stocks. 

McDonald’s (MCD)

Buying McDonald’s (NYSE:MCD) stock below $300 is a very smart move as the stock is under pressure after the management issued a slower growth guidance. The stock is down 7% year-to-date and has moved from $257 to $300 over the past six months. As one of the most sought-after businesses, the current dip in MCD stock is temporary. 

It has nailed the franchise business model, which helps keep the operating costs to a minimum while generating steady revenue growth. The company saw a 9% rise in comparable store sales for 2023, and it might be facing slower sales growth, but it is still making money. 

It makes significant money from royalties and franchise fees, which keeps the business rolling. McDonald’s has partnered with Krispy Kreme (NYSE:DNUT) and will add doughnuts to its menu soon. The stock enjoys a dividend yield of 2.42% and has a record 48 years of consistent dividend increases.

Starbucks (SBUX)

Global coffee chain Starbucks (NASDAQ:SBUX) has become a familiar name today. Also known for brand value, the company is on a global expansion spree and aims to have 55,000 stores worldwide by 2030, up from the current 36,000. Nearing its 52-week low, Starbucks stock has dropped over 4% in the month and is exchanging hands for $88. 

The current dip is due to a slowdown in sales, but I believe it could be temporary. Despite reporting a dip in consumer traffic in the U.S., the company is still making money. The numbers aren’t as disappointing as the market makes it look. The comparable store sales increased by 5% for global sales, driven by a 3% rise in consumer traffic and a 2% rise in average spending. 

The company is working on cutting costs and launching new products that will help improve sales. There is ample cash flow, which helps support the steady dividends. For a stock trading at $88, a dividend yield of 2.57% isn’t bad. This is one of the top restaurant stocks offered at a huge discount. 

Domino’s Pizza (DPZ)

At its 52-week high, Domino’s Pizza (NYSE:DPZ) has been soaring. DPZ stock is up 22% YTD and 53% in the year. Domino’s Pizza is a leading fast-food restaurant that has seen sales, revenue and market share expand. 

As the world’s biggest pizza company, it always expands into new markets and has carved a loyal fanbase. Eating pizza will never go out of fashion, and the company will always stay relevant. Out of the total locations, about 99% are owned by franchises, meaning Domino’s earns royalties and fees without incurring any operating costs.

This has also helped the company to open more locations in the past few years. Its franchises are making a lot of money, so there will be more demand to open them across new locations. Domino’s is a low-margin and asset-light business, making it a forever stock to own. 

Trading at $505, the stock has the potential to keep soaring higher as consumer spending improves. The stock also enjoys a dividend yield of 1.19% and has enough liquidity to keep the dividends going. 

PepsiCo (PEP)

PepsiCo (NASDAQ:PEP) is a top restaurant stock to own because of the huge umbrella of brands it owns. The company is more than a beverage giant; it generates significant revenue from Frito-Lay and Quaker Oats in Northern America. PepsiCo is a global brand with a rich history, and the company has steadily diversified to ensure that it meets the changing needs of consumers. 

The company has ensured steady market expansion and revenue growth by diversifying into snacks and healthy foods. We will see substantial numbers once consumer spending improves and the summer months set in. The company has been able to scale due to its diversified businesses and the growth in its international operations. I am expecting another strong year of growth in 2024. 

Even if the consumption of aerated beverages drops, Pepsi can make money from the snacks business. Trading at $169, the stock has been moving sideways over the past six months and is a dividend aristocrat. PEP enjoys a dividend yield of 2.98%, and its dividends have increased for over 50 years. 

Chipotle Mexican Grill (CMG)

Chipotle Mexican Grill (NYSE:CMG), a top fast-food chain offering healthy meals, has more than 3,400 locations and aims to open more this year. It opened 271 new restaurants in 2023 and has a target of opening 285-315 in 2024. While the stock is one of the most expensive restaurant stocks, it trades at $2,895 but looks very tasty.

It is up 28% YTD, driven by exceptional quarterly results, and has soared 66% in the year. Those who bought the stock during the pandemic lows will be taking home big gains right now. The company saw a 15.4% YOY rise in revenue to hit $2.5 billion, and the EPS increased by 27% YOY to reach $10.21.

The company has announced a 50-for-1 stock split, bringing the stock price lower in the coming months. Wall Street expects the company to keep growing earnings, which will help the stock move higher. 

Shake Shack (SHAK)

The restaurant chain Shake Shack (NYSE:SHAK) is expanding its market share and is ready to enter Canada. Known for its delicious burgers, Shake Shack offers unique menu items, making it more popular than its competitors.

SHAK stock is trading for $102 and has soared 39% YTD. The stock went from $68 in January to over $100 today, and this is one restaurant stock that has kept steadily moving upwards throughout the past year. The stock gained after the company reported impressive quarterly results. While they weren’t record-breaking, the guidance showed that the company was recovering quickly.

It saw a 2.8% rise in same-store sales and a 20% surge in revenue to hit $286.2 million, a little over the estimates. The company reported an EPS of $0.02, a strong improvement from the loss of $0.06 in the same quarter of the previous year. Shake Shack’s upward rally is set to continue as consumer spending improves this year. 

Restaurant Brands International (QSR)

If you truly want to invest in a company that benefits from consumer sentiment, Restaurant Brands International (NYSE:QSR) is my top pick. The company owns a large umbrella of brands that continue to generate revenue. Its exposure to the top four brands, including Burger King, Tim Hortons, Popeye’s and Firehouse Subs, makes it a world-class business.

The company aims to grow to over 40,000 locations by 2028 and has a robust cash flow profile, which allows for steady dividend payouts. QSR stock is exchanging hands for $76 and looks highly undervalued. It has a dividend yield of 3.03%, which will attract passive income investors.

The company is spending on remodeling its Burger King restaurants and investing in marketing and advertising to drive sales. If you want to invest in only one restaurant stock, this is the stock to own. The diversified business will ensure steady growth and passive income. 

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.