Operations
Restaurant professionals make predictions for New Year 2025
Restaurants will face a number of challenges in the new year. We talked to restaurant professionals to learn what's shaping 2025.
January 2, 2025 by Mandy Wolf Detwiler — Editor, Networld Media Group
As 2025 unfolds, the restaurant industry faces a unique set of challenges. While the economy may have softened its landing, lingering inflation, elevated interest rates and a tight labor market continue to squeeze profit margins. Independent restaurants grapple with competition from powerful chains, while all establishments must contend with evolving consumer demands, including a growing focus on health and value. The rise of new weight-loss medications like Ozempic is expected to significantly impact consumer behavior, forcing restaurants to adapt their menus and portion sizes. Meanwhile, attracting and retaining top talent remains paramount, requiring significant investments in employee training and competitive benefits packages.
Navigating these complexities will require a delicate balance of operational efficiency, innovative menu offerings and a deep understanding of the evolving needs and preferences of today's discerning diners.
We talked to a number of restaurant industry leaders to see what challenges the new year is set to bring.
Tight labor market
In 2025, we're anticipating a notable shift in the restaurant landscape. The market for skilled managers is likely to become increasingly competitive. Experienced leaders will choose stability over movement. That means restaurants, especially emerging brands, will need to double down on their management training programs to develop talent internally rather than relying on external hiring. On the hourly employee side, while we'll continue to see the natural turnover, the bigger challenge lies in meeting elevated training demands from a new generation of workers. Restaurants have to adapt to a reality where new hires require more comprehensive onboarding in areas like customer service and food handling. An investment in foundational skills training isn't a 'nice-to-have' anymore – it's critical for survival as the industry continues to consolidate and become more competitive. The brands that will thrive are the ones that build robust training programs to develop both their management and hourly workforce from the ground up.
— Rachael Nemeth, CEO and co-founder of Opus Training
To stay competitive in 2025, restaurants must build workplaces that attract and retain top talent. The labor market is still tight. By offering comprehensive benefits — retirement savings, healthcare and flexible scheduling — restaurants can stand out as employers. At the same time, adopting technology for smoother operations and a supported workforce will be key. Those who embrace these strategies will position themselves to thrive in an increasingly competitive labor market.
— Jordan Boesch, CEO of 7shifts
Challenges facing small restaurant owners
Independent and small restaurant owners are facing a number of challenges as we head into 2025 including the residual effects of the inflation spike of 2021 and 2022, elevated cost of capital due to a higher interest rate environment and a low unemployment rate which means a tight labor market for those looking to add staff. While the economy seems to have achieved the soft landing that the Fed has worked to engineer and employment remains strong, small businesses must contend with elevated interest rates, a tight labor market and judicious customers who are still upset by the significant runup in prices over the past several years.
In addition, many independent restaurant owners are finding it difficult to compete with the growing economic power of national restaurant groups. National restaurant chains provide many benefits to their franchise owners including access to lower-cost capital, discounted pricing on food products and other supplies, strong brand recognition and national marketing campaigns that drive business to the franchise. These benefits can create considerable advantages for franchise restaurants, making it difficult for local competitors to compete; however, the appeal of a local restaurant is often found in the attributes that make it different from a chain, such as its unique menu, attractive ambiance or charismatic waitstaff. We find that many local restaurants are able to secure a high level of customer loyalty and are able to command premium pricing over many franchise restaurants as a result.
— Ben Johnston, COO of Kapitus
Changing consumer habits
For 2025, we're likely to see a significant shift in the restaurant industry driven by the popularity of new drugs like Ozempic, Mounjaro, Trulicity and Wegovy. These medications are changing consumer eating habits given reduced levels of appetite. Restaurants will respond by cutting back portion sizes and adjusting prices accordingly — something we haven't seen in decades. This strategic shift can attract a new wave of health-conscious customers and, surprisingly, may boost overall revenue as smaller portions allow for creative menu diversification, reduced food waste, and better customer satisfaction. Restaurants that adapt quickly could find themselves in a prime position to capture this emerging trend.
The restaurant problem people on these drugs present is they go out to eat and can't finish their entrees because of the portion size. While some may get a bag to go, a large majority would skip the restaurant rather than pay a premium for something they can't eat or could cook at home.
— Mike Ford, CEO of Skydeo
Value trends continue
"Value meals and menus blew up in 2024 as consumers became more cost-conscious, but the value trend is becoming too much of a bandwagon. If QSR and restaurant brands are engaging in the trend to stay competitive, but not providing true value, they won't secure consumer loyalty. Brands should be thinking about how they can provide value beyond pricing strategies. Consumers will now be looking for menu innovation and seamless ordering experiences that meet consumers where they are in the digital age."
— Hope Nieman, CMO at Tillster
About Mandy Wolf Detwiler
Mandy Wolf Detwiler is the managing editor at Networld Media Group and the site editor for PizzaMarketplace.com and QSRweb.com. She has more than 20 years’ experience covering food, people and places.
An award-winning print journalist, Mandy brings more than 20 years’ experience to Networld Media Group. She has spent nearly two decades covering the pizza industry, from independent pizzerias to multi-unit chains and every size business in between. Mandy has been featured on the Food Network and has won numerous awards for her coverage of the restaurant industry. She has an insatiable appetite for learning, and can tell you where to find the best slices in the country after spending 15 years traveling and eating pizza for a living.
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