2025 Outlook – Part One
Steady online ordering brings food waste donations to the forefront of priorities. Ordering food online increases restaurant sales, but it also can potentially increase wasted food if proactive measures aren’t taken – for both the business and consumers at home. When consumers order more food online, it’s clearly good for business – but it can also make it harder for businesses to manage inventory. At the same time, it can result in consumers creating more waste if they order more than they can eat. In 2025, restaurants need to have a plan in place that ensures they are effectively managing inventory and redirecting unused, still edible food to donations. Not only will this avoid wasting resources, it also will ensure they avoid a potential spike in wasted food – and ultimately their costs – due to the increased demand from online orders. In 2025, the food service industry will increasingly leverage technology for waste tracking and diversion. We may see the rise of advanced AI-driven platforms that not only analyze waste generation, but also optimize collection routes, monitor compliance with regulations, and provide real-time insights into waste management. The movement towards plant-based foods and locally sourced ingredients will continue to gain momentum in 2025, reducing overall food waste through better inventory management and demand forecasting. This shift will likely be complemented by an increased focus on reducing waste generated from animal products. I expect more states and municipalities to implement stronger organics recycling laws in 2025, mandating food waste diversion for commercial food service operators. These regulations will likely expand beyond predominantly large entities to include smaller establishments, driving widespread adoption of food waste diversion practices across the industry…
2025 Outlook – Part Two
Experts weigh in on restaurant trends and challenges. Following the pandemic, restaurants focused heavily on Front-of-House technology to streamline and digitize the diner experience. While features like ordering and paying via QR codes have become the norm, Back-of-House systems have lagged in sophistication. In 2025, we’ll see operators increasingly adopt advanced Back-of-House solutions to gain deeper insights and more precise control over profit margins. As economic pressures and fluctuating food costs persist, these technologies will be critical for maintaining profitability and ensuring long-term sustainability. Automation and AI will play a bigger role in restaurant back-of-house operations in 2025 as restaurants look to make processes efficient across the board. Automation looks like a lot of things, but for kitchens, this means introducing robotics into the kitchen – augmenting, not replacing, the work of employees. Robots in the kitchen have gotten a bad reputation, but people are realizing the technology is truly as simple as a machine that can do a simple task. For example, look at Chipotle – they started rolling out robotic technology like automated avocado slicers into their kitchen to cut down time on manual labor and cut costs – while keeping their employees involved in the process. Even though AI tools can’t peel an avocado or make rice balls for sushi, AI definitely will be entering the kitchen more in 2025. From inventory management to predictive labor scheduling, AI tools will help restaurants cut costs and adapt in real-time, while providing operators valuable data to help inform business decisions. Many operators have a wealth of data but aren’t putting it to work. I think 2025 will be the year restaurants focus on turning insight to action through integrations. APIs, like those opened by Toast, are becoming critical to ensure systems—whether for sales, inventory, or payroll—“talk” to each other, allowing operators to get out on the floor while being accurately informed about their business. Looking to next year, we really don’t know what’s going to happen to the restaurant industry. I think that the biggest challenge ahead is the unknown, especially when it comes to labor and economic policies that directly affect the work we do every day as an industry…
Bielat Santore & Company
Extending Our Best Wishes to You for the Holidays
May you have the spirit of Christmas which is peace, the gladness of Christmas which is hope and the heart of Christmas which is love. And may they remain with you throughout the New Year.
2025 Outlook – Part Three
AI continues to revolutionize restaurant operations and guest services. Data, Data, Data. It is atop the list for restaurants looking to modernize, differentiate, and elevate experiences. So much data is generated at every point within a restaurant, whether fast casual or fine dining. And the digitization of operations over the past few years means that the industry is getting better at capturing that data. Foot traffic or heat mapping, menu item engagement, or consumer demographics by time of day. The question now becomes – how to make sense of that data and use it to elevate the dining experience. The quicker businesses can feed that information back into operations, the better, whether for personalized dining, staffing optimization, or advertising and marketing. This is where we are heading, and I expect to hear lots of chatter about how AI, automation, and analytics partners can support restaurants on this journey to realize quicker time to value. The restaurant sector is poised for a seismic shift as AI integration takes center stage. While over half of restaurant operators (52 percent) already say they want to embrace AI within 12 months, I predict that number will soar even higher. Restaurants are already experimenting with using AI to handle drive-through orders to allow human employees to focus on customer interactions in the restaurant. We’ll see the continued shift of leveraging AI to help with other commodity tasks to free up humans to have more time to give customers higher-quality hospitality. The rise of personalized group dining experiences is reshaping catering trends, and L&L is already meeting the demand. Offering Bento Packs for individually portioned meals and a la carte buffet-style trays for customizable group settings, L&L’s catering options bring Hawaiian-style comfort food to events large and small throughout our locations nationwide. This trend taps into a broader consumer desire for bold flavors and multicultural dining. L&L Hawaiian Barbecue brings a distinct fusion of Asian, Pacific Islander, and American influences to consumers in the continental U.S. This culinary evolution is rooted in immigrants from Japan, China, Korea, the Philippines, and Portugal – then later America during World War II, who each made significant contributions to Hawaii’s flavor landscape. These tastes became deeply embedded in Hawaii’s culinary identity through the iconic “Plate Lunch.” In a time when consumers seek out both quality and quantity, L&L continues to provide substantial portions at an accessible price point. With the signature Plate Lunch delivering generous combinations of proteins, rice, and macaroni salad, L&L’s offerings give patrons a cost-effective way to enjoy hearty meals that are prepared fresh with quality ingredients…
Midweek Dining Heats Up At Full-Service Restaurants
Data from several sources point to an uptick in traffic on Mondays, Tuesdays, and Wednesdays. Many restaurants in city centers, including San Francisco, are experiencing the same shift and this trend isn’t just impacting urban locations. During BJ’s Restaurants third-quarter earnings call in late October, executives noted a pickup in weekday traffic, for instance, while Placer.ai data shows that Dave & Buster’s is also seeing more midweek visits, with Thursdays seeing an 11.3% increase in foot traffic during Q3 compared to the same period last year. Both companies have been investing in midweek promotions, including BJ’s Pizookie Meal Deal, which is available Monday through Friday, and Dave & Buster’s 50% discount on games on Wednesdays. Promotions aside, other data sources corroborate a move toward midweek dining. A new report from OpenTable, for instance, shows that Wednesdays have experienced an 11% increase in dining year-over-year – the largest increase of any day. OpenTable’s research shows that 43% of Americans plan to dine out on Wednesdays, with 41% saying they’re doing so to break up the week. Toast’s quarterly Restaurant Trends Report also points to an increase in reservations on traditionally slower days. Same-store reservations for Monday (+11%), Tuesday (+11%), and Wednesday (+8%), typically slower days for full-service restaurants, were all up in Q3 2024 compared to Q3 2023, while Saturdays dipped by 1%. Toast notes that this trend may suggest customers are avoiding weekend crowds or are grabbing dinner out after a long workday instead of cooking at home. That said, Saturdays remain the busiest days for reservations, accounting for 27%. Still, Placer.ai compared the share of full-service visits by weekday every year since 2019, finding that there has, indeed, been a shift toward non-traditional dining-out days. Mondays made up 10.2% of visits in 2019, for instance, while they made up 10.7% in 2024. Fridays had the most pronounced shift during this time, with 17.6% of visits in 2019 compared to 17.1% in 2024. Saturdays have also decreased since 2019, from 21.1% in 2019 to 20.8% in 2024, while Wednesday visits grew from 11.1% in 2019 to 11.4% in 2024.
How Inefficient Contracting Processes Are Holding Back Your Restaurant Business
A streamlined contracting process is essential for protecting your company from costly inefficiencies. Over nearly 30 years in both law firm and in-house settings, I have spoken with representatives at companies of all sizes—including those in the restaurant industry—regarding their contracting process. Generally, when asked about this topic, they reply, “Sure, we have a contracting process.” That response is usually followed up with a look of anxiety, even concern, about what I say next: “Great! How good is it?” In other words, if using a report card scale, where would the company land? Shockingly, even in-house counsel have given some all-too-common answers:
- I hadn’t really thought about it lately, but maybe a “C.”
- I don’t have time to evaluate the process. It seems to work OK, so maybe a “C.”
- It was in place when I joined the company, and no one wanted to change it, so maybe a “C or D.”
- The hard truth is that companies—including those in the restaurant industry—can’t afford NOT to regularly evaluate their contracting process because a “C” or “D” process is likely hurting the organization in a variety of ways, including:
- Confusion about how to get legal work done. For example, whom do legal requests go to?
- Lack of clarity regarding what or whose “paper” to use for contracting.
- Outdated or insufficient contracting forms that are overly complicated and/or don’t contain appropriate company protections.
- Unrealistic expectation setting, both internally and externally, regarding turnaround time (no “service level agreement” from the legal team or outside counsel stating expected completion for legal tasks).
- Ineffective or no communication between internal teams once a request is submitted.
- Inability of sales to close mission-critical deals in a timely fashion due to a protracted and/or nonexistent contracting process.
- Termination and/or expiration of important existing contracts without the opportunity to discuss renewal in a timely fashion.
- Ultimately, financial detriment to the company due to all of the foregoing…
State Supreme Court Backs Bars, Restaurants in COVID-Related Insurance Dispute
The ultimate guide to best practices. A unanimous North Carolina Supreme Court has ruled in favor of bars and restaurants that sued their insurance company over a refusal to cover losses linked to COVID-19 shutdowns. In a separate case, the court unanimously rejected a COVID-related insurance claim from clothing retailer Cato. Fourteen bars and restaurants led by North State Deli sued the Cincinnati Insurance Company and Cincinnati Casualty Company over the insurers’ decision not to cover claims linked to government-mandated COVID shutdowns. The plaintiffs all had similar commercial property insurance policies when COVID prompted them to shut down in 2020. “Those policies protect the businesses’ building and personal property as well as business income from any ‘direct physical loss’ to property not excluded by the policy,” wrote Justice Anita Earls for the unanimous court. “The dispute here is whether a ‘direct physical loss’ occurred when government orders forced temporary restrictions on the use of and access to the restaurants’ physical property.” “Cincinnati argues that these temporary physical closures are not the type of direct ‘loss’ contemplated by the policy and refuses liability for coverage. The restaurants argue that these closures are a covered property ‘loss’ under the policy’s ordinary meaning and seek a declaratory judgment to that effect,” Earls added. A trial court sided with the restaurants, but the state Court of Appeals reversed that ruling. “We disagree with the Court of Appeals based on our Court’s long-standing rules of insurance contract interpretation,” Earls wrote. “Because a reasonable policyholder in the restaurants’ shoes could expect ‘direct physical loss’ to property, as used in this policy, to include the results of COVID-19-era government orders which affected the restaurants’ use of and access to their physical property, and because the policy otherwise contains no exclusion for viruses, we construe the ambiguity here in favor of coverage. Accordingly, we hold that this policy does cover the restaurants’ alleged losses and that the restaurants are entitled to their motion for partial summary judgment.” The state Supreme Court case heard the North State Deli case along with a series of COVID-related disputes during two days in October. One of the other cases heard at that time involved clothing retailer Cato’s lawsuit against its insurer…
Why Activist Investors Will Keep Targeting Restaurants in 2025
Activist investors took dramatic measures to boost shareholder value in 2024. With traffic down across much of the restaurant industry and many chains struggling with same-store sales growth, 2024 was a big year for activist investors. In their minds, brands like Starbucks, Potbelly, The Cheesecake Factory, Red Robin, Portillo’s, and Cracker Barrel have room for improvement and better ways to boost shareholder value. Restaurants certainly aren’t a new target for such investors. In 2013, activist investors pressured Darden to sell Red Lobster to a private equity firm. A few years ago, Red Robin underwent a year-long battle with an investor that led to a shift in its board. “Activists have always loved retail, and as a subset of retail they’ve always loved restaurant chains or publicly traded casual dining or fast food chains,” Keith Gottfried, CEO of Gottfried Shareholder Advisory, which helps corporations fend off activist investors. “It’s hard to think of a major restaurant chain that has not had its encounter with an activist.” From an activist standpoint, restaurants are easier to understand compared to complicated technology companies, and activists feel like there are more levers to pull to extract shareholder value compared to other sectors, he said. Activists also love publicity and media attention and are unlikely to go after no-name companies. “If you go after any of the chains that are relatively well known, you’re going to get a lot of media coverage,” he said, pointing to the likes of Cracker Barrel and Potbelly. With the move toward delivery, pickup and omnichannel, the restaurant industry has shifted more toward a model that prizes efficiency over size, Gottfried said. Growing off-premise channels have been a great way to create revenue streams and boost shareholder value, he said, without incurring major real estate expenses…
Did You Know?
Nine critical HR and payroll steps to prepare your restaurant for 2025. A new year is creeping up on us again, bringing fresh opportunities—and challenges—for restaurant operators. With so much already on your year-end plates, how can you find the time to lay the groundwork for team and business success in 2025? Below, I’ve outlined nine key HR and payroll items to prioritize over the coming weeks that will also start next year off right. From updating policies to gearing up for tax season, these steps will enhance your compliance and position your restaurant for sustained growth…
Employee Tip
Food order receiving; stop losing money at your restaurant’s back door. Running a restaurant is no easy feat, and one area where many restaurant owners unknowingly lose money is through improper food order receiving procedures. But don’t worry — today, I’m going to share some essential tips on how to train your team to do it right, so you can get what you pay for and keep your costs under control. Over the years, I’ve seen firsthand how improper food order receiving can lead to significant losses…