As we look ahead to 2025, the restaurant industry has made an impressive recovery from the pandemic with a projected $1.106 trillion in consumer spending at U.S. food service establishments in 2024. But while foot traffic has returned to pre-pandemic levels, the industry has permanently changed. Consumers now expect faster service, seamless delivery options, and healthier, more sustainable menu choices, while restaurants are struggling with higher labor costs and a potential economic downturn.
For restaurant owners, navigating the new normal is an essential part of doing business to stay competitive and profitable. Incorporating the latest technology offers a simple way to tackle these challenges, all while boosting efficiency and streamlining operations.
The U.S. restaurant industry is on a steady growth trajectory, bouncing back from the pandemic’s most challenging days. Key trends that are currently shaping the industry as 2024 comes to an end are:
Among all restaurants, we expect to see growth of 3.8% in 2024, according to Technomic. The fast-casual segment is leading the way with forecasted sales growth of 6.4%, followed by:
The higher growth seen in the fast-casual and QSR segment reflect a cautious yet positive trend as most consumers continue to reach for affordable dining options amidst economic uncertainties. Meanwhile, the fine dining segment is experiencing moderate growth from higher income consumers to celebrate occasions.
Overall, the steady growth across all restaurant segments signals a slow but resilient bounce-back as the restaurant industry adapts to changing consumer expectations.
The food delivery trend didn’t end with the pandemic – in fact, it’s only getting more popular. By the end of 2024, the online meal delivery market is expected to hit $95.78 billion. Earlier this year, we saw about 60% of U.S. consumers ordering delivery or takeout at least once a week, which reflects a shift toward convenience-focused dining.
This ongoing demand for at-home dining options has pushed restaurants to invest in online ordering systems and updated delivery menus to improve the customer experience. As consumers continue to prioritize convenience, delivery-driven dining is becoming a core element of the restaurant industry. Ultimately, adapting to delivery helps restaurants achieve a twofold purpose – expanding their reach while also meeting evolving customer expectations.
Although inflation has cooled since the pandemic, many restaurants are still struggling with rising food and labor costs. The Producer Price Index for all foods stands at a level 32% above pre-pandemic figures and average restaurant wages rose 29% from November 2020 to November 2023. These rising expenses are putting significant pressure on restaurant margins, leading many owners and operators to adjust pricing and streamline operations. More than 61% of restaurant operators planned to raise menu prices in 2024, according to Restaurant365.
As operational cost challenges continue to persist, owners and operators are turning to automation and technology to stay afloat. Adapting and finding innovative solutions is a key ingredient to staying profitable without sacrificing customer experience.
As the cost of dining out continues to rise, consumers are becoming increasingly price-sensitive, with many opting to reduce their restaurant spending. According to Technomic, 55% of customers stated they would visit restaurants less frequently if prices kept climbing, which indicates a potential tipping point for price tolerance. Nearly 40% of consumers, according to a survey conducted by Revenue Management Solutions, say they’re cutting back on dining out in 2024 compared to 2023. Additionally, almost half of those spending less are choosing more affordable restaurant options, a trend that’s remained steady.
To keep up with this shifting consumer preference, balancing affordability with quality will be crucial. Restaurants may need to focus on value-driven menu items, creative promotions, or bigger portion sizes to remain appealing for budget-conscious diners.
According to Yelp, pop-up restaurants led all restaurant categories in new openings between May 2023 and April 2024, with a remarkable growth rate of 155%. This spike in popularity reflects a new consumer shift toward dining as an overall experience rather than simply a meal.
For diners, the novelty and exclusivity of a limited-time menu created by talented chefs adds a sense of urgency, which makes a pop-up feel like a special event. For chefs and restaurateurs on the other hand, pop-ups act as a creative platform to experiment with new dishes and test innovative concepts without the financial commitment of a permanent location. Additionally, pop-ups give chefs a unique way to reach new audiences and explore different markets, building buzz while introducing fresh, original fare.
Looking forward to 2025, the restaurant industry faces both new challenges and exciting opportunities, while adapting to stay competitive. Here’s a look at several notable predictions for the coming year and how they could shape the future of dining:
In 2025, the food service industry is forecasted to see a real growth rate of 1.0%, which is adjusted for inflation. Considering that inflation is expected to be 1.8% in 2025, the unadjusted or nominal growth rate would be 2.82%.
Despite economic uncertainties, the steady growth between 2024 and 2025 reflects a resilient demand for dining. Restaurant owners and operators can take advantage of this stability by refining their operations through technology and investing in customer experience to stay competitive.
While the sales forecasts for next year are promising, there have been discussions of a possible recession looming. According to J.P. Morgan Research, there’s a 45% chance of a U.S. recession happening by the end of 2025.
In the case of an economic downturn, restaurant operators will have to adapt to new consumer preferences to stay profitable. As we’ve already seen in 2024, diners are likely to become even more cost-conscious, choosing affordable menu options or dining out less frequently. Preparing for a potential economic slowdown now could help restaurants stay resilient and capitalize on opportunities in a cautious market.
In the case of a recession, many consumers are likely to continue dining out by “trading down” to more affordable dining options that fit tighter budgets. Because of this, limited-service restaurants, such as fast food establishments, are typically more robust due to their budget-friendly prices and lack of tipping expectations. Historical data suggests that limited-service restaurants often see growth even in recessions, with an average sales growth rate of 2.43% in downturns, compared to just 0.08% for full-service restaurants.
As a result, full-service restaurants should consider adopting proactive strategies during a recession, like offering more value-driven options, to retain customers who might otherwise shift to limited-service alternatives.
In 2025, labor shortages are expected to remain a significant challenge for the restaurant industry. According to the Food & Beverage Industry Report 2024, 82% of surveyed restaurant businesses are currently hiring, with chefs being the most in-demand position. As owners and operators look to the year ahead, 26% of them anticipate staffing shortages as the top operational risk – 3% more than last year.
This data suggests that finding and retaining skilled workers in the restaurant industry will likely remain a core struggle. To address these gaps, many restaurants are exploring automation for simpler tasks and employee retention strategies to keep up with service quality.
AI and automation have already started to play a larger role in helping restaurants streamline operations and reduce dependency on staff, which isn’t expected to slow down anytime soon. From personalized menu recommendations to automated payroll systems, there’s advanced technology that can help with both customer-facing and back-end tasks.
For example, AI-powered drive-thru lanes have the ability to significantly boost service speed and accuracy. SoundHound, an early leader in the voice AI space, claims their AI can handle over 90% of orders without human involvement, leading to a 10% reduction in wait times in drive-thrus. Ultimately, this change will allow restaurants to focus on further improving customer experiences and operations while relying on technology to handle routine tasks.
Among 2024 and 2025 restaurant industry trends and potential economic uncertainty, technology is becoming increasingly important for restaurant owners looking to stay profitable.
As consumers continue to lean heavily on delivery and takeout options, digital ordering platforms and POS systems streamline the process. Data-driven tools, like inventory and sales forecasting software, help reduce waste and optimize inventory levels. Automated people management systems, like Push Operations, can make a big impact by streamlining HR tasks – from scheduling and time tracking to payroll and hiring. Designed specifically for restaurants, Push automates time-consuming tasks, like creating schedules and calculating payroll deductions and overtime, freeing up your time to focus on future-proofing your business.
Ready to streamline your restaurant operations? Join thousands of happy restaurant owners who use Push. Book a demo with one of our specialists to see just how easy people management can be.
“In the labor numbers, we were reporting about a $300 to $400 difference than what we were getting through Push!”
-Tara Hardie, ZZA Hospitality Group, 16 locations
