A look at the restaurant environment, and what to expect this year

As operators and consumers continue to deal with rising costs and inflation, Chad Moutray, the Association’s Senior Vice President of Research & Knowledge, addressed some of the trends and concerns currently affecting the restaurant industry. 

What were some of the biggest takeaways from this year’s State of the Restaurant Industry report?
Increased food and labor costs, competition, and inflationary pressures, were the biggest takeaways this year. We found that basically nine out of 10 operators felt this would be a very competitive year, particularly where in-person visits are concerned. This has been going on for years now, starting in 2020 when on-site restaurant traffic shut down because of the pandemic, but our current tracker is still showing weakness five years later. It’s more challenging for fullservice restaurants, which are more labor-intensive, and not as bad for quickservice restaurants. That segment is less reliant on on-premises traffic.

What is the biggest challenge for operators this year?
They’ll continue to get squeezed by costs. Wages will continue to go up and overall costs will rise. This doesn’t even take tariffs or anything else into consideration. Optimism over sales and value will remain an important part of the conversation, but costs will be a big part of the story.

It seems value is extremely important this year. Why?
Anyone who's heard me speak recently knows I like to talk about the two “Americas”, and our study does dig into that this year. Many people have been doing well and are feeling flush. They're going out and spending, and it’s evident their pent-up dining demand is less than that of lower-income individuals. For Americans struggling right now, value is really where the rubber meets the road. Those who dine out want to experience convenience, great food and service. They expect to come away feeling good. 

Talk a bit about the importance of value.
We made a special effort this year to show that value is, literally, much more than the price that’s paid. From the consumer’s perspective, it’s especially important. They’ve got a whole set of expectations that are dependent on the occasion and place even greater emphasis on the dining experience, particularly at more upscale restaurants. The data is clear: consumers, especially younger ones, will pay more for experiences they value. They’re looking to use restaurants to experiment with different foods, beverages, flavors and seasonings. They want to experience new items and offerings they haven’t tried before.

Download the 2025 State of the Restaurant Industry report here