80% of operators are optimistic their sales will be either higher than or the same as they were in 2024, according to the National Restaurant Association’s 2025 State of the Restaurant Industry report
February 6, 2025
The restaurant industry surpassed $1 trillion in sales for the first time ever in 2024 and that pace isn’t expected to slow down this year. In fact, the National Restaurant Association predicts it will accelerate. According to the association’s 2025 State of the Restaurant Industry report, published today, sales are projected to reach $1.5 trillion this year.
For context, the sales forecast for the nation’s second-largest private industry was $997 billion in 2023 and $863 billion from pre-pandemic days in 2019. No doubt pricing to offset inflationary pressures plays into this growth, with menu price increases peaking near 9% in March 2023. They have since cooled, however, and are about 3.6% over last year.
This trajectory is driven by more than just pricing, however. The report indicates that consumers have plenty of pent-up demand, with about 80% stating they would use restaurants more frequently if they had the money (including 81% for table service restaurants, 76% for quick-service, snack, deli, and coffee concepts, and 82% for delivery). Some recent trends suggest consumers may be feeling a bit more confident with their financial status. The general sentiment from the recent ICR Conference, for instance, was that the environment is stabilizing, as traffic and sales numbers are improving from where they were in the beginning and middle of 2024. Potbelly chief executive officer Bob Wright said at the conference that his company is “seeing some breathing room now,” as data suggests consumer debt has peaked and as wage rates are rising slightly faster than overall inflation.
Bloomberg Intelligence senior industry analyst Michael Halen confirmed in a note that credit card debt and auto loan delinquencies rose at a slower pace toward the end of the year, while credit card delinquencies also fell.
“Restaurant sales will advance with better consumer spending in 2025, we believe, as most recent sentiment and (Consumer Price Index) data showed improvement year-over-year,” he wrote.
Because of this stabilizing backdrop, more operators (80%) are optimistic that their sales will be either higher or about the same as they were in 2024.
That’s not to say things will be easy, however. Those same operators expect competitive pressures to intensify in 2025. According to Technomic Ignite data, there were about 691,181 chain restaurant locations in 2024 versus just over 703,000 in 2019, indicating a near-complete recovery from COVID. The National Restaurant Association report shows that 29% of operators plan to open new locations this year, with limited-service operators (35%) more likely to do so than full-service operators (22%).
In addition to competition, operators continue to navigate choppiness with food and labor costs. During a recent interview, William Blair analyst Sharon Zackfia said she also expects a continuation of the themes that underscored 2024 – “increasingly picky consumers demanding high-quality offerings, elevated service, and convenience (preferably all three).”
The association’s report also illustrates that operators expect an ongoing struggle to recruit and retain employees this year. That said, the forecast calls for a bump in total employment to support the anticipated sales growth, with more than 200,000 net new jobs expected to onboard in the industry this year. This would bring the total employment to nearly 16 million workers by year-end. As of April 2024, the restaurant and foodservice industry provided 15.5 million jobs, or 10% of the total workforce. This included 12.4 million jobs at eating and drinking places.
“The fundamentals of the restaurant industry are strong, and operators are optimistic about the year ahead,” National Restaurant Association president and chief executive officer Michelle Korsmo said in a statement. “Industry sales are expected grow more than 4% this year, and employment should reach nearly 16 million jobs. That growth will come from restaurant operators finding the balance of value and experience for consumers, and innovating breakthrough efficiency in their operations.”
As food costs continue to put the squeeze on consumers, perhaps the biggest silver lining for the restaurant industry in 2025 is that most consumers prefer a menu to a shopping cart. Eighty-eight percent of adults said they enjoy going to restaurants, while 73% said they enjoy going to the grocery store. Further, 80% of adults said going to a restaurant is a better use of their leisure time than cooking at home.
The trends that will define 2025: value, loyalty, experience, and technology
Some of the major themes that are emerging and are expected to pick up this year include a redefinition of value, the increasing importance of loyalty programs, a need to balance the demand for on-premises and off-premises dining, and the competitive advantage of adding technology tools.
Value
For value, 95% of restaurant operators said their customers are more value-conscious than they used to be, while 55% responded in 2024 by adding new discounts, deals, or promotions. Some value strategies that have gained traction in the quick-service segment, according to the report, include limited-time offers, value/combo meals, and buy-one-get-one-free deals. About 80% of consumers said they would take advantage of discounts for dining on less busy days of the week or times of day, while the same percentage said they would take advantage of a discounted add-on.
For operators who don’t want to get too deep into the value environment, real-time promotions are enticing to 86% of consumers, particularly at full-service concepts.
Notably, the idea of value is evolving beyond promotions, as consumers increasingly prioritize experience and hospitality alongside affordability. Cleanliness and friendly service are major factors influencing dining decisions, and operators must strike a balance between offering value-based pricing while enhancing the overall dining experience, according to the report. Earlier this week, Chipotle CEO Scott Boatwright said his company’s holistic approach to value is a reason it continues to yield positive sales and traffic while also gaining market share. He calls Chipotle’s value proposition, “benefit over price.”
Loyalty
The industry has seen its fair share of loyalty program adoption and enhancement in the past year-plus and that isn’t expected to slow in 2025. This acceleration is driven by consumer demand – 61% of restaurant customers said a loyalty program is an important factor when choosing a restaurant for a delivery order, while 54% of limited-service customers said they prefer places where they are loyalty members. Forty-one percent of full-service customers said the same. Operators are also benefiting from this trend, with 76% of limited-service restaurants registering an increase in traffic in 2024 driven by their loyalty program.
On-premises and off-premises balance
Another major opportunity for operators this year is finding a balance between their dine-in and off-premises businesses. While 90% of fine dining operators and 87% of casual dining operators see in-person dining as critical to their success in 2025, off-premises dining remains essential. Eighty-two percent of consumers, including 89% of millennials, want to order delivery more often if their budgets allow. Takeout remains popular, especially for Gen Z (67%) and millennials (64%) who view it as essential.
Most consumers said they wish they had more choices of restaurants that offer takeout and delivery, and a vast majority want more variety on the off-prem menu. Notably, off-premises business continues to grow, with 50% of all restaurants noting it is a higher mix versus 2019. To accommodate this changing model, more than one in three operators have made changes to their restaurant space. Where there is room for off-prem improvement, according to most consumers, is maintaining the proper food temperature, reducing wait times, and improving the quality of the food. Still, more than 90% of consumers said they were satisfied with their off-premises experience, including ease of ordering and payment, overall food quality, and accuracy.
Technology trends
Finally, operators continue to become more comfortable with technology implementation (and costs) and 83% said the use of technology provides a competitive advantage. Sixty-seven percent of operators (73% of limited-service operators and 60% of full-service operators) said they incorporated more technology into their restaurant operation during the past two to three years, including both customer-facing and operational items. Nearly 70% said the solutions have made their restaurant more productive and efficient.
Beyond that, technology’s impact on the business has been a “mixed bag,” as the association notes. For instance, a minority (40%) said tech investments improved overall customer satisfaction, 30% said it led to cost savings, 30% said overall employee satisfaction improved, and 30% said technology improved training. Moreover, just 28% of operators said their investment in technology improved the profitability of their restaurant.
Still, about 60% of operators plan to invest in equipment or technology this year to improve efficiency, while the same amount plans to invest in tech that will enhance the overall customer experience. Other tech investments planned for this year include:
53% of operators plan to strengthen their cybersecurity
65% to digital or location-based marketing
28% to artificial intelligence integration
27% toward technology that can control costs
Contact Alicia Kelso at [email protected]
