Restaurant365's State of the Restaurant Industry Survey Shows Labor & Sales Challenges as 2025's Top Hurdles

News provided by

Dec 12, 2024, 07:59 ET

R365's annual study reveals restaurant operators planning investments in sales and marketing alongside employee recruitment and retention.

IRVINE, Calif., Dec. 12, 2024 /PRNewswire/ -- Restaurant365, the leading all-in-one restaurant management platform, today released findings from its annual industry survey. Restaurant leaders representing more than 6,200 locations shared 2024's top challenges and opportunities and their 2025 priorities, including increased marketing and sales efforts alongside new benefits and programs to attract and retain staff.

2024 By the Numbers

Participants reported continued food and labor cost increases, with 88% experiencing rising staff expenses, compared to 89% in last year's annual survey, and 86% reporting an increase in food costs. For those with rising labor, 51% reported a 1% to 5% increase, 41% experienced a 6% to 14% increase, and 8% saw labor costs rise more than 15%. The most significant impact was on restaurants' ability to achieve their maximum potential, with 59% of respondents saying labor challenges led to operating below full capacity.

For food, 53% reported a 1% to 5% jump, 37% saw a 6% to 14% increase, and 10% saw a more than 15% rise. The primary response was menu price increases, with nearly 61% of respondents adjusting prices to cope with the new reality.

Looking to 2025

Restaurant leaders expect waves in the year ahead, with 32% pinning recruitment and retention as their top challenge, 27% most concerned about rising food costs, and 21% flagging sales volume as the main hurdle.

Despite potential challenges, the industry is both optimistic, as total restaurant sales crested $1 trillion for the first time on record, and ready to pivot to continue growing.

"For more than a decade, Restaurant365 has partnered with operators nationwide as they turned challenges into growth opportunities thanks to innovation and perseverance," said Restaurant365 CEO and Co-founder Tony Smith. "As the second largest employing industry in America, it's no wonder labor is the top concern for our industry. We remain committed to investing and developing our platform to help restaurants across America employ millions while also keeping food costs in check and boosting their sales."

More than half of those surveyed, 55%, said increasing sales is 2025's top priority, followed by reducing costs and enhancing guest experiences. Costs, however, will remain a challenge, with 82% of respondents expecting food costs to increase and 77% predicting rising labor expenses. To combat revenue challenges, 36% of leaders said their top investments would be in enhanced sales and marketing technology, promotions, and loyalty programs, alongside 27% who are planning staff investments, including enhanced training, salaries, recruitment, and benefits.

As operators look to bolster these two key areas, they're also closely watching employee training and guest preferences. At present, 58% of respondents said they provide one to two hours of training per week, with most of it, 45%, happening shoulder-to-shoulder and another 21% on digital platforms. Deploying training to enhance operators and guest experience is key, especially as restaurant operators expect continued shifts in consumer preferences and employee turnover challenges, with 39% of those surveyed seeing turnover in the 11% to 25% range. For shifting consumer preferences, 34% expect more takeout and delivery in 2025, 28% expect greater demand for healthier options, and 24% expect less frequent dine-in visits. How leaders meet these needs will become increasingly important, as nearly half of respondents said third-party delivery services account for between 11% and 30% of revenue.

About Restaurant365®
Restaurant365 is the leading back-of-house accounting, inventory, workforce management, and payroll solution developed specifically for the restaurant industry. R365's all-in-one restaurant management platform simplifies day-to-day management for leaders at all levels, empowering them to control food costs, optimize labor, and improve guest experiences. Restaurant365's cloud-based architecture and robust integrations allow it to connect to hundreds of POS providers, vendors, and banks, providing accurate, timely reporting that offers a complete view of the business and where managers can take meaningful action. Restaurant365 is headquartered in Irvine, California, and has an office in Austin, Texas. The company is backed by Bessemer Venture Partners, ICONIQ, KKR, L Catterton, and Serent Capital. Additional information is available at restaurant365.com.

For press related questions about Restaurant365, please contact [email protected].

SOURCE Restaurant365