Spent several days recently in Cayucos. Had a very good lunch at Hoppe's Bisto. A good salad and a nice piece of tuna. It is a little bit pricey but has excellent service, nice decore, outdoors dining, if desired, and very good food with great ingredients.
At the other end of the scale, I had excellent deep fried calamari and chips at Schooners Wharf. We ate on the second floor facing the ocean where they offer bar and outdoor seating. More formal indoor dining is available at dinner on the first floor. I will go back here anytime I am close to the area just to eat the calamari again- it was exceptionally tender and both the cocktail and tarter sauces were good.
I recommend the Albertsons in Morro Bay for groceries and a good selection of the region's wines at fair prices.