Technology

Use your data or lose your margins

QSR margins are squeezed by soaring food and labor costs, compounded by potential tariffs. Survival hinges on using existing tech to integrate data, turning food and labor into assets. Analyzing usage, forecasting demand and optimizing schedules based on performance unlocks savings and improves service.

Photo: Adobe Stock

June 6, 2025 by Oli Ostertag — GM of Operator Cloud, PAR Technology

Margins in the quick-service restaurant industry have never been tighter. Over the past four years, food prices have soared 29% and labor costs have jumped 31%, putting massive pressure on profitability. And now there's a new hit: tariffs on food and beverage products. While the exact tariff policies remain uncertain, the National Restaurant Association said 25% tariffs will cost U.S. restaurants an estimated $12 billion, translating to a potential 30% profit loss for independent operators.

Rising costs are no longer just a challenge, but a threat to operational survival. But there's hope: restaurants that embrace operational data and technology can turn this pressure into performance. The key lies in transforming food and labor — your two highest variable costs — from liabilities into assets through smarter tech-driven decisions.

Start with what you already have

The good news? You don't need to start from scratch. Between your POS, drive-thru timers, scheduling tools and inventory management software, your restaurant is already generating valuable data.

The problem is that data is often trapped in silos — isolated in different systems and applications that don't communicate with each other because they aren't designed to. When these tools are designed to seamlessly integrate with other systems, the user reaps the benefits of cutting waste, controlling costs and delivering better guest experiences.

This isn't about more tech, it's about better use of what's already in your toolkit.

Rethinking food costs in a volatile market

Let's start with food because skyrocketing prices and new tariffs are making this category harder to predict and more expensive to mismanage. But food is also one of the most controllable costs if you have the right data.

The first step is understanding the difference between actual and ideal food costs. Your inventory management software should track ingredient-level usage. Combine that with POS data, and you'll start to spot gaps like over portioning, spoilage or inconsistent prep.

Take a real-world example: A regional pizza chain discovered it was using the wrong cheese scoop — just one size too large. That tiny misstep cost a single location over $25,000 a year. Once corrected, the savings were immediate.

Small adjustments driven by data can unlock major gains.

Next, look at how you're forecasting demand. Are you using historical sales, weather patterns and promotional calendars to guide ordering and prep? Efficient inventory is about more than what's in stock — it's about knowing what your customers want, when they want it and preparing accordingly.

When you predict demand accurately, you reduce over-ordering, limit spoilage and eliminate the costly scramble to 86 popular items during peak hours.

Labor costs deserve the same scrutiny

Labor is your other major variable cost — and just like food, it's full of optimization potential. The key isn't just staffing the right number of people. It's staffing the right people at the right time in the right roles.

That's where restaurant labor management software changes the game.

Modern labor tools let you schedule dynamically instead of simply filling shifts. You can pull in data from past sales trends, daypart demand and even local events to build smarter schedules that flex with your business.

But smart scheduling isn't just about quantity, it's about quality.

Look at performance metrics like upsells, speed of service and order accuracy. One team member might be great at engaging guests and boosting average check sizes. Another might be lightning-fast on the line but less suited for guest-facing roles.

Use this data to assign roles based on strengths. Put the upseller at the counter during peak hours. Place the kitchen pro on the grill when speed is critical. The result? Higher revenue, faster service and happier guests.

The real magic happens when systems talk

Individually, your systems provide useful insights. But when they're connected — your POS, inventory management software, restaurant labor management software and beyond — you unlock the bigger picture.

With integrated data, you can identify patterns and spot inefficiencies you'd otherwise miss:

Are you overstaffing lunch shifts because you're still using last year's demand patterns?
Is your inventory running out of high-margin ingredients because orders aren't aligned with promo performance?
Are certain locations seeing food costs creep up due to training gaps or prep inconsistencies?

These are signals. And they're solvable.

Integration also reduces decision lag. When managers can access real-time dashboards instead of juggling spreadsheets or waiting for reports, they can take immediate action.

Controlling the controllable

At the end of the day, you can't control tariffs. You can't control inflation. But you can control how your restaurant responds.

In an industry where the average profit margin hovers around 5%, every avoided cost matters. Every optimized shift, saved ounce of cheese and faster order all add up—and it adds up fast.

The most successful QSRs won't be the ones that absorb these cost increases. They'll be the ones that outsmart them.

Data, when used intentionally, can become a lifeline. It's what turns stress into strategy and guesswork into growth. By treating your food and labor management tools not as checkboxes but as active levers, you can defend your margins and improve the guest experience at the same time.

There's no denying the current climate is tough. But within your four walls, and your tech stack, there's more control than you might think.

By breaking down data silos and turning insight into action, restaurants can go from fighting for margin to building it. And that's not just a recipe for survival — it's a strategy for long-term success.

Start with what you have, focus on what you can control and let data do the heavy lifting.

About Oli Ostertag

Oliver "Oli" Ostertag, General Manager of Operator Cloud at PAR Technology, has had many roles at PAR, including running the company's international and business operations functions. Prior to joining PAR, he was a corporate attorney representing large-cap private equity sponsors in multi-jurisdictional public and private M&A in the technology, financial services, and consumer goods sectors. He also previously ran operations at NearSt, a London-based e-commerce company.

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