#United States #Irvine #Restaurant365 #Food Costs #Labor Costs

Restaurant365's Midyear Insights

In a bid to navigate the complex landscape of the restaurant industry, Restaurant365 has once again unveiled its biannual survey results. The report sheds light on the pressing challenges and opportunities that restaurant operators are facing in 2025, with a notable emphasis on managing food and labor costs effectively.

Key Findings from the Survey

The survey, which included insights from restaurant leaders representing over 5,000 locations, highlighted that a significant 89% of operators are grappling with rising labor costs. This marks a sharp rise from 79% in the previous year who anticipated such increases. Among those experiencing a hike in labor expenses, 82% reported a rise of 1% to 5%, while 15% faced an even steeper increase of 6% to 14%. The scenario for food costs is equally concerning, as 91% of respondents indicated rising food prices, up from 82% at the year's outset.

As many operators look to adjust to these increases, 56% are planning to raise menu prices, a decrease from the earlier figure of 61%. This suggests a cautious yet necessary response to continually shifting cost dynamics. Additionally, 18% of the participants are intensifying efforts on inventory management and tracking waste, indicating a proactive strategy towards minimizing costs.

However, a staggering 65% of operators are choosing not to operate at full capacity to counteract high labor and recruitment costs. This issue is compounded by some establishments limiting their operating hours as a means of managing quality and costs.

Challenges Ahead

Looking towards the remainder of the year, the survey revealed a prevailing concern about external factors that may impact food pricing significantly. A considerable 78% of restaurant leaders anticipate effects from impending tariffs, with 64% foreseeing potential increases in food costs due to trade barriers.

Despite these challenges, a clear focus on the fundamentals remains. The top three concerns for industry insiders are managing food costs, labor expenses, and driving sales volume—indicating a need to strike a balance between cost control and revenue generation. Notably, 52% of surveyed leaders identified enhancing sales as their primary target.

Tony Smith, CEO and Co-founder of Restaurant365, highlighted the perseverance and innovative strategies employed within the restaurant sector: “The restaurant industry is clearly facing many challenges this year, but has also reached record-setting levels of sales and employment through their innovation.”

Prioritizing Growth and Training

In light of the data presented, more than 40% of operators are planning to ramp up their promotional and marketing budgets. This surge is particularly aimed towards off-premise dining, which has experienced a transformative shift in consumer habits post-pandemic. A subsequent 35% of respondents reported increased demand for takeout and delivery services, contrasting with a 33% noted decline in dine-in visits.

Moreover, amid careful consideration of employee retention strategies, 30% of the surveyed businesses have already increased wages. Another 30% have reported higher spending on enhanced staff training initiatives. This dedication to staff development is coupled with a focus on ensuring a better work-life balance, which is a growing priority for restaurant operators.

With many operators not planning to open additional locations this year (58%), it is crucial for existing establishments to optimize revenue streams. Interestingly, while some operators explore expansion options, only a small minority are contemplating the addition of new venues.

Conclusion

As the restaurant industry navigates through the unpredictable terrain of 2025, the findings from Restaurant365’s midyear survey paint a picture of an industry at a crossroads between rising operational costs and potential sales innovations. By bolstering employee training and adjusting marketing strategies, restaurants aim to adapt effectively to the ever-changing market conditions. Restaurant365 continues to provide essential tools to empower restaurant leaders to thrive amidst these challenges, aiming for both improved margins and enhanced customer experiences.

For more about Restaurant365 and its comprehensive solutions, check out Restaurant365.