Investing in Restaurant ETFs

The AdvisorShares Restaurant ETF, launched in 2021, is the only ETF solely focused on investing in the restaurant and food industry. The ETF's holdings include restaurants, bars, pubs, fast food, takeout facilities, and food catering services. This ETF also features a creative ticker symbol (EATZ) and a catchy mission to allow an investor to "put your money where your mouth is."

As of early 2025, this ETF held almost 25 restaurant stocks, led by the following five:

• Nathan's Famous (NASDAQ:NATH): 6.4% of the fund's holdings
• Darden International (NYSE:DRI): 6.3%
• Brinker International (NYSE:EAT): 6.1%
• Texas Roadhouse (NASDAQ:TXRH): 5.9%
• Domino's Pizza (NASDAQ:DPZ): 5.1%.

Because of its short operating history, this ETF is quite small. That makes it riskier than other ETFs with restaurant holdings. It also has a rather high ETF expense ratio of 0.99%. 

The Invesco Leisure and Entertainment ETF holds more than 30 leisure and entertainment companies, including those engaged in designing, producing, or distributing goods and services. As a result, the fund doesn't focus solely on restaurants. It had the following sector allocation in early 2025:

• Hotels, restaurants, and leisure: 65.3%
• Entertainment: 23.9%
• Food and staples retailing: 5.4%
• Media: 3%
• Airlines: 2.5%

Its roughly 30 holdings included: 

• Darden Restaurants: 3.8% of the fund
• Brinker International: 3%
• The Cheesecake Factory (NASDAQ:CAKE): 2.8%
• Dutch Bros (NYSE:BROS): 2.5%
• Shake Shack (NYSE:SHAK): 2.4%

The fund also had a 5.5% allocation to restaurant delivery company DoorDash (NASDAQ:DASH)

It has a fairly reasonable expense ratio of 0.57%. Overall, the fund is a larger, more diversified way to invest in the entire entertainment and leisure industry rather than focusing solely on the expected growth in restaurant spending.

The Consumer Discretionary Select Sector SPDR Fund allows investors to focus on the consumer discretionary sector of the S&P 500 index. These companies depend on consumer spending. The ETF had more than 50 holdings in early 2025 in the following industries:

• Hotels, restaurants, and leisure: 26.4%
• Specialty retail: 23.7%
• Broadline retail: 23%
• Automobiles: 16.9%
• Household durables: 4.2%
• Textiles, apparel, and luxury goods: 4.1%
• Distributors: 1.2%
• Auto components: 0.4%
• Leisure products: 0.2%

Because of its diversification, this ETF doesn't offer as much exposure to the restaurant sector as the other ETF options. However, it does count two in its top 10 holdings: McDonald's (NYSE:MCD) at 4.9% and Starbucks (NASDAQ:SBUX) at 2.8%.

On the plus side, this large ETF also boasts a very low expense ratio of 0.08%, making it a low-cost way to invest in overall consumer spending growth, including restaurants.

People love going out to eat at restaurants. Roughly 29% of consumers eat out at least once a week, while nine out of 10 people would say they enjoy going to a restaurant. The love of dining out has sales in the restaurant sector on track to reach $1.5 trillion in 2025, according to the National Restaurant Association. Given our love for dining out, that number should continue rising.

The industry's long-term growth prospects bode well for restaurant stocks. However, the restaurant industry can be challenging since the economy, inflation, labor market, and other external and internal factors can affect performance.

Investors looking to play the long-term upside potential of the restaurant sector might want to consider taking a broad-based approach by investing in exchange-traded funds (ETFs) focused on the industry. Here's a closer look at several ETFs with high concentrations of restaurant stocks.

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