Restaurants Poised for $1.5 Trillion in Sales this Year
Despite lingering challenges. The fundamentals of the restaurant industry are strong, and operators are cautiously optimistic about the year ahead, according to the National Restaurant Association’s 2025 State of the Industry report. The industry is projected to reach $1.5 trillion in sales and add more than 200,000 net new jobs this year, bringing total restaurant and foodservice employment to 15.9 million. That growth comes on the heels of a challenging year. While the broader economy continued to expand in 2024, restaurant operators faced persistent business pressures. Consumers became increasingly selective with their spending as pandemic-era savings dwindled, and rising costs cut into profitability. Sixty-one percent of operators reported declining customer traffic between 2023 and 2024. Nearly four in 10 restaurants were unprofitable last year. More than half of operators (53 percent) were still carrying debt accumulated since the pandemic, and the cost of doing business continued to rise—with food costs and wages both up over 30 percent compared to 2019. Nearly all operators cited labor (96 percent), food costs (95 percent), and inflation (95 percent) as major challenges. Despite these headwinds, operators are entering 2025 with measured confidence. More than eight in 10 expect sales this year to either increase (41 percent) or hold steady (41 percent) compared to 2024. Competition is expected to intensify, though, with 48 percent anticipating a tougher battle for customer dollars, including 53 percent of quick-service and 44 percent of full-service operators. Many of the same challenges from 2024—labor costs, food costs, and staffing—are expected to persist. Quick-service operators cite labor costs and hiring as their biggest hurdles, while full-service restaurants are most concerned about food costs. The Association notes that industry growth in 2025 could be supported by a strong labor market, steady wage gains, and lower interest rates. It also warns of potential downside risks from geopolitical tensions, rising fiscal debt, and political instability. The State of the Industry report is based on economic analysis, operator and consumer surveys, and industry forecasts. Here are five key takeaways shaping the year ahead…
Restaurant Menu Price Inflation Eased Last Month
Food away from home prices grew at less than half the rate as grocery prices. Restaurant menu prices rose 0.2% in January, according to new federal data released on Wednesday, continuing a period of easing inflation for an industry struggling to get customer count growth. Menu price inflation last month was less than half the rate of the price hikes seen at grocery stores and other retailers. Food at home prices last month rose 0.5% compared with December, according to data from the U.S. Bureau of Labor Statistics. To be sure, supermarket inflation remains much lower than restaurant menu price inflation when compared to a year ago. Food at home prices over the past year were up 1.9%. At restaurants, prices were up 3.4%. Prices at both limited-service and full-service restaurants were up 3.3% over the past year. But the data could suggest a shift in inflation back to grocery stores that at the very least could give consumers less reason to eat at home. Restaurant menu prices rose at a much faster rate than grocers in late 2023 and for most of 2024, as operators fought higher labor and food costs and grocers kept prices largely frozen. Wide gaps in inflation between the two were cited as a key reason for weak restaurant traffic. But restaurant operators in recent months have fought a value war to pull in customer counts…
Bielat Santore & Company – Restaurant Industry Alert
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How to Hire Gen Z for Your Restaurant
By 2025, Gen Z and Millennials will outnumber all other generations in the workforce by 18 million. Think about your last round of hiring. You probably received a decent volume of applications, you spent money boosting the ads, yet you’re left still looking for quality. How do you attract applicants that are excited to work for you, that fit your brand? The workforce has changed; the game has changed, and it’s affecting your ability to effectively hire for your restaurant. Today’s young workforce (ages 13-28) and quickly behind, Gen Alpha, has been raised on smartphones. They’re comfortable telling technology pertinent information about themselves and then allowing technology to do the work on their behalf. Said another way: they don’t search. Period. Platforms like TikTok, YouTube, Amazon, Netflix, Stitch Fix, and DoorDash (this list could go on) already know their users, understand their preferences, and effortlessly deliver the next video, beauty gadget, movie, outfit, or meal tailored just for them. They don’t flip through classifieds or even browse job boards the way we used to. Let’s put this in restaurant terms. Remember when guests used to walk in, grab a menu, and browse through every page? Now, they’re on their phones before they arrive, checking your reviews, looking at food photos, and getting recommendations based on their past orders. Your future staff is doing the same thing with their job search. The new generation of restaurant workers wants technology to do the heavy lifting. Do you know that the number one job search in the world is a blank search? Effectively, the job seeker is saying “tell me, tell me what is available that I would be interested in.” That’s right – a blank search. They expect jobs to find them, just like Netflix suggests their next show or DoorDash recommends their next meal. Think about it like this: just as your POS system predicts your inventory needs based on past sales, today’s job seekers expect platforms to understand their skills and interests, then match them with the right opportunities. So how can you change up your hiring strategy to attract this workforce?…
The Restaurant Industry Workforce Shrunk in January
The full-service segment remains below its pre-pandemic workforce by more than 4%. Data released Friday morning from the U.S. Bureau of Labor Statistics shows that the restaurant industry’s workforce shrunk by 15,700 jobs in January, while the overall workforce added 143,000 jobs during the month. While job growth continues, it is moderating, and January’s numbers fell short of economists’ expectations. Still, the unemployment rate inched down to 4%, from 4.1% in December, marking an eight-month low. The report follows December’s robust numbers in which the U.S. gained an upwardly revised 307,000 jobs. Eating and drinking places added a net 23,200 jobs in December, while the leisure and hospitality sector overall grew by nearly 46,000 positions. In total, eating and drinking places added a net 148,000 jobs in the second half of 2024, according to the National Restaurant Association, marking an improvement from the net decline of 11,000 jobs during the first six months of the year. As of January, eating and drinking places were 72,000 jobs (or 0.6%) above their February 2020 employment peak. The quick-service, fast casual, and coffee and snack segments continue to outpace early 2020 levels. However, the full-service category remains below its pre-pandemic level by about 4.1%. The National Restaurant Association’s State of the Industry report, released this week, shows that 77% of operators continue to be significantly challenged by recruitment and retention. “Now is the time for most businesses to focus on keeping their best people, investing in training, and creating a workplace where employees want to stay. It’s not just about filling positions. It’s about building a team that’s primed and ready for whatever the future holds,” Restaurant365 general manager Joe Hannon said. “This is especially important within the restaurant industry, which saw a dip in hiring in January, and has a need to retain staff. Restaurant operators can build up and support their staff through cross-training and opportunities for career growth.” There are silver linings despite January’s dip. Unfilled job openings are back to pre-pandemic levels and employee-initiated turnover is at its lowest point in nearly a decade, for instance. Further, more teens and young adults are entering the workforce and many — about 40% — choose to work at restaurants. The report said that 78% of operators did not have enough employees to meet customer demand in 2021, while just 32% say the same now…
7 Tips for Building a Profitable Mocktail Beverage Program
Nonalcoholic drinks are a must. A seismic shift is happening in the beverage industry: the growing popularity of nonalcoholic drinks. Experts predict that nonalcoholic drink consumption will rise by a third through 2026, driven by changing consumer preferences and wellness-focused lifestyles. But capitalizing on this trend takes more than a token Shirley Temple on the menu. A successful nonalcoholic beverage program requires strategic planning, from thoughtful ingredient selection to creative marketing and proper pricing. Here’s how bars and restaurants can turn mocktails into a major revenue driver. Several key trends are fueling the demand for high-quality, nonalcoholic beverages:
- The Rise of Mindful Sobriety: Consumers are drinking more intentionally, with 41 percent actively reducing alcohol consumption for health and wellness reasons.
- Gen Z’s Influence: Younger generations are redefining drinking culture, with 23 percent of Gen Z and 24 percent of millennials opting for nonalcoholic beverages more frequently than older demographics.
- Flexitarian Drinking Habits: Today’s consumers don’t fit neatly into ‘drinker’ or ‘non-drinker’ categories. Instead, 82 percent of nonalcoholic beverage drinkers also occasionally consume alcoholic drinks, and 41 percent identify as ‘substituters’ who opt for nonalcoholic choices in certain situations…
Why Restaurants Are Ditching Plastic for Wooden Kitchen Tools
Why it’s time to ditch plastic cutting boards and utensils for good. Switching from plastic to wooden kitchen tools can improve food safety, reduce environmental impact, and enhance durability in restaurant kitchens. With increased focus on health in the food industry, every detail matters more than ever—from the quality of ingredients to the tools used in food preparation. That’s why wooden kitchen tools are becoming a top choice. They add a touch of natural beauty and are safer, healthier, and a significant upgrade from plastic boards, which can introduce harmful chemicals and microplastics into meals. Ready to exceed your customers’ expectations and make a lasting impression on the dining scene? Here’s why switching to wooden tools could be the smartest move for your restaurant this year. Plastic cutting boards and utensils can seem convenient, but their hidden risks outweigh the benefits. When exposed to heat, plastics can release microplastics, tiny, invisible particles that can end up in food. Studies show these microplastics aren’t just bad for the planet; they’re also raising red flags for human health, potentially disrupting hormones and increasing the risk of stroke and heart attacks. Plastic kitchen tools can also leach harmful chemicals like BPA when they come into contact with hot food or liquids. These chemicals have been linked to serious health concerns, including developmental issues and hormonal imbalances. Beyond these health risks, plastic utensils and tools also come with a hidden cost: while they’re cheaper upfront, they are much less durable and need to be replaced more often. Unlike plastic, most wooden cutting boards are naturally free of harmful chemicals and won’t leach unwanted substances into your food. They’re heat-safe and non-reactive, making them ideal for health-conscious kitchens focused on safety and quality. Did you know certain woods, like maple, have natural antibacterial properties? This makes wooden tools safer to use and a smarter choice for keeping your kitchen cleaner. Unlike plastic, which can trap bacteria in scratches and grooves, wooden tools are naturally hygienic and easier to keep clean…
Did You Know?
Preparing Your Restaurant for Winter Weather and Added Risks. Winter has already made its presence felt across much of the U.S. and, with a weak La Nina expected, the country can anticipate a season of highly variable weather. This unpredictability underscores the importance of winter preparedness. There is never a better time than the present for restaurants to conduct a quick audit to ensure they are ready for the challenges of severe weather and temperatures and are able to minimize the risk of damage from winter hazards, such as frozen pipes…
Employee Tip
Building a Culture of Feedback. In an industry where cultivating guest relationships is critical to success, operators often forget that developing positive relationships with the people serving those guests is equally, if not more, important. Without a culture of feedback, once a month or so, after a grueling shift, I would march into the chef’s cramped office – which was a closet under the stairwell – and threaten to quit. This happened several times over the course of six months until the last time I threatened to quit, he simply said: ‘you know what, you are in here once a month threatening to quit, go.’ And just like that, I was out of a job and they were down a line cook…
