Texas restaurants just navigated Q2 2025 and the forecast isn’t looking as bubbly as the cocktails they used to serve. Nearly 40% of operators reported declining alcohol sales, and for an industry where booze once paid the bills, that’s a seismic shift.

According to the Texas Restaurant Association, only about a third of owners reported steady booze sales. Even more telling: 31% said sales were slightly down, and 6% said they were significantly worse compared to the previous year. So it’s not a glitch—it’s a trend.

With inflation tightening wallets, alcohol is one of the first luxuries diners ditch. As TRA’s Kelsey Erickson Streufert put it, “[Alcohol is] one of the ways people quickly cut back.” Cost-conscious diners, especially amid rising food and labor prices, mean fewer boozy checks per table.

Gen Z Doesn’t Drink Like Your Father

Younger patrons are rewriting the rules. Gen Z and younger Millennials are drinking significantly less than their older peers. A damning Gallup poll reveals alcohol consumption has hit a 90-year low, with only 54% of U.S. adults admitting they drink. For under-35s, the number is even lower—gen-Zers once 72% are now around 62%.

Running out of top-shelf options? Many operators are pouring creativity into their non-alcoholic menus instead. From mocktails to house-made zero-proof “spirits,” restaurants are leaning into options that keep the bar full—without the buzz. Some venues, like the Four Seasons in Philadelphia, have doubled non-alcoholic drink revenue in just months.

Texas Goes BYOB (With a Corkage Fee)

Some solo operators are sidestepping slumping liquor numbers by ditching the license drama altogether. In Houston, elegant small plates spots like Tatemó and Hidden Omakase are thriving under a BYOB model. No costly liquor license. No overhang of spirits stock. Just better margins and guest flexibility—with a respectful corkage fee that feels fair in exchange for inspired dining.

At Austin’s Shakertins, the mood is strategic, not defeated. Founder Brad Hawkins reported industry-wide concern about dipping alcohol spend—but he’s not clinking glasses to closure. Instead, he’s doubling down on local trivia nights, UFC watching, pool tables, and creative pricing. “If you’re smart… offer great service every time—they’ll still come for a cold beer and a good time.”