New report shows consumers embrace both protein-packed menus and late-night indulgence ahead of holiday season
Square’s latest restaurant data highlights a year of contrasts: consumers are balancing wellness and nightlife, while businesses are cashing in on branded merchandise.
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New report shows consumers embrace both protein-packed menus and late-night indulgence ahead of holiday season (Photo: Square)
Bars, breweries, and cafés are diversifying revenue with branded merch ahead of the holidays
Across Square sellers, breweries, bars, and cafés are seeing particular success with branded retail items, particularly as consumers look for gifts ahead of the 2025 holiday season. As of Q3 2025, 56.5% of breweries, 22.9% of cafés, and 17% of bars are offering merch like t-shirts, hoodies, and hats.
In terms of which items are most popular with customers, t-shirts are most purchased (58.2%) followed by hats (22.8%), hoodies (11.5%), and totes (7.5%).
“Resilient restaurant operators are smartly looking beyond traditional revenue streams, and branded merchandise offers an opportunity with typically higher margins than food service – and with marketing built-in,” said Ming-Tai Huh, Head of Food and Beverage at Square. “But success depends on having the right systems in place – with Square, businesses can switch easily between restaurant and retail modes in their point-of-sale device and set up e-commerce, allowing for easy expansion into merch sales without added operational complexity.”
Menus bulk up on macros
Consumers are growing more health-conscious, increasingly looking to consume food that has additional wellness benefits. Square looked at demand for health-focused and “functional” menu items such as protein and matcha since the beginning of 2023.
With “proteinmaxxing” on the rise, diners are also looking for protein-packed menu items. In Q2 2025, orders for menu items that contained the word “protein” were up 17% year-over-year, and in Q3 2025, this accelerated to 20.6%. This trend was especially pronounced at full-service restaurants and cafés, where orders for protein menu items were up 25.4% and 22% in Q3 YoY, respectively.
Matcha demand blooms as the tea takes over cafés and bakeries alike
Matcha lattes, too, are another key example of the rise in “functional” beverages given green tea’s health benefits. In Q3 2025, orders for matcha were up 36.5% YoY, a slight deceleration from Q2 2025 when matcha orders were up 44.3%. Overall, though, matcha has seen major growth over the past few years, and this trend is expanding beyond cafés – orders for matcha-flavored menu items were up 47.5% at ice cream shops and 40% at bakeries in Q3 YoY.
For Square seller Bluestone Lane, health-forward menu items have been a key part of their offerings since they were founded: “Matcha isn’t new and has been on our menu for over eight years, but the amount of innovation and new flavors in the space are what’s keeping it exciting for consumers,” said Nicholas Stone, Founder and Executive Chairman of Bluestone Lane. “We also leaned into and saw success in protein-powered drinks this past summer as customers sought out delicious and healthy ways to fuel their gains.”
Using Square AI, restaurants can quickly understand which items – like a protein smoothie or strawberry matcha latte – are resonating with customers by asking simple questions in plain English, helping them keep their menus aligned with current trends and consumer demand.
In cities like Detroit and Fayetteville, nightlife – and late-night tips – thrive
Though consumers lean into wellness by day, nightlife continues to be on the rise. Square analyzed the share of in-person restaurant and bar transactions between 7pm and 4am.
Detroit, MI had the highest percentage of late-night transactions at 28.4% as of Q3 2025, followed by Fayetteville, AR at 24.2%. Meanwhile, Miami – a traditional nightlife hub – is maintaining a strong nightlife presence, with 22.7% of transactions occurring late at night, but emerging markets are gaining ground. Tampa and Atlanta both show consistent growth, reaching 22.5% and 22.1% respectively in Q3 2025. Meanwhile, cities like San Francisco and Seattle with earlier closing times for bars maintain more moderate late-night scenes with around 15-16% of transactions occurring after 7pm.
Seasonality and weather are key drivers of nightlife activity, too, with many cities seeing peaks in summer months. Boston, for example, saw its late-night transaction share jump from 13.8% in Q1 2025 to 17.4% in Q3, highlighting how weather impacts nightlife activity in colder regions.
Late-night diners and bar-goers are also consistently more generous tippers, Square data shows. In Q2 2025, the overall average tip was 14.99% – but tips steadily increase as the night goes on, peaking at 2am when customers leave an average of 18.55% overall and 19.48% at bars specifically.
After 2am, tip percentages begin to moderate but remain well above the overall average, with 4am tips still reaching 16.78% at all establishments and 18.63% at bars.
Amid longest government shutdown in history, D.C. spending shifts to breweries, retail, and local causes
The government shutdown has created ripple effects across Washington D.C.'s local economy, according to Square data comparing October 2025 to October 2024.
While food and beverage spending saw a modest decline of 2.4%, spending on beauty and salon services held mostly steady with only a slight decrease of .1%. Retail spending jumped 9.1%, with particularly strong growth in clothing stores (up 22.9%) and tobacco and vape shops (up 17.2%).
Notably, donations to non-profit organizations, including charitable, religious, and political groups, increased by 9.7%, indicating D.C. residents may be responding to the shutdown by increasing their support of community organizations.
About Square
Square helps businesses turn transactions into connections and businesses into neighborhood favorites.
In 2009, Square started with a simple invention – the first mobile card reader, which changed how the entire financial system thinks about small businesses. Square has since grown into a global business platform helping millions of sellers of all sizes participate and thrive in their communities.
Whether independently run or a global chain, Square understands that sellers succeed when they have the freedom to focus on the experiences that keep customers coming back. From point of sale and payments to online commerce, staff management, cash flow tools, and more, Square brings together the tools sellers need to run and grow on one intelligent platform. For more information, visit squareup.com.
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