Let’s face it – 2024 was a tough year for the restaurant business. Operators struggled with the usual challenge: labor shortages, high turnover, slim profit margins. But then these challenges were magnified by surging costs, increasingly value-conscious customers, and a spate of high-profile food contamination incidents. Most restaurant operators are more than happy to turn the page to a new year.
So now that the new year is upon us, what can we expect as an industry? And more importantly, how can you assure your restaurant success in 2025?
Let’s start with some good news. According to the National Restaurant Association’s 2024 State of the Restaurant Industry report, U.S. restaurants combined for more than $1 trillion in sales last year.
Consumer tastes and behaviors have changed in many ways since the COVID-19 crisis. However, one thing remains true: U.S. consumers like dining out. The National Restaurant Association report finds that 9 in 10 consumers surveyed enjoy going to restaurants, where they can sample meals that they can't easily make at home.
In spite of the challenges we face as an industry, this positive news offers us something to build on. Read on to find out how you can improve your chances of restaurant success in 2025.
Consumers are increasingly value conscious. Diners want to enjoy the restaurant experience, but the cost of living in the U.S. is historically high. As a result, consumers are more cautious than ever about how and where they spend their money.
This puts restaurants in a particularly difficult spot. Costs are historically high for restaurants as well. Lowering menu prices may not be realistic. But this article from LinkedIn suggests that there are other ways to create value for consumers.
“Instead of slashing prices across the board,” the article advises, “tailor offers that align with your brand’s core strengths. The goal is to create a dining experience that’s worth every penny, motivating customers to return.”
Offer weekday specials to attract regulars on slow nights. Start a customer loyalty program. Promote creative happy hour events. Find ways to add value to the dining experience without raising your costs.
Whatever you do, base your approach on what your customers actually do. There are a variety of ways to collect and analyze data about customer behavior. One of the leading restaurant technology trends is that restaurants across the industry are investing in data collection and analysis. An experienced third-party vendor can help you gather, analyze, and understand data about customer behavior, and then use that information to build an effective loyalty program.
We hear the same thing from restaurant operators in every segment of the industry – costs are simply too high. According to the National Restaurant Association’s 2024 State of the Restaurant Industry report, 98% of operators say they are wrestling with rising labor costs and 97% say that higher food costs are a major issue.
The same report says that 38% of restaurants were unable to turn a profit in 2023. The reality is that many of the higher costs are baked into our current economy. Rising labor and food costs are often due to economic conditions that are well outside your control as a business owner.
But there are things you can control and steps you can take to reduce costs without sacrificing quality. Many of these cost-cutting strategies center on improving the overall sustainability of your operation.
Some of these strategies may require an upfront investment, but the day-to-day cost reductions they bring about can contribute directly to your restaurant success in 2025 and beyond.
The pandemic may be in the rearview mirror, but labor challenges remain a constant for restaurant operators. According to the National Restaurant Association, 45% of restaurant operators say they don’t have enough employees to take care of the customers they already have.
The industry overall is projected to keep adding jobs in 2025, so the pressure is on restaurant operators to find new ways of attracting and retaining employees. Achieving restaurant success in 2025 demands a more thoughtful and creative approach.
Naturally, offering competitive wages is central, along with flexible working hours and decent benefits. But your approach should also extend to investing in employee training and professional development. Give your employees the chance to master new skills and seize new leadership opportunities.
Not only does this type of professional development improve morale, job satisfaction, and company loyalty, but you’ll also be helping your employees create more value for your business.
The competition for survival in the restaurant industry is fierce. And the National Restaurant Association’s report says that 45% of operators expect this competition to intensify in the coming year.
Vying for customers with divided attention and limited funds requires a marketing strategy that finds customers and engages with them. That’s a challenge in a social media landscape where potential consumers are spread across platforms like Instagram, TikTok, and Facebook, and then moving from these platforms to new ones. What is the best way to share behind-the-scenes content, showcase your food, and engage with customers?
The right mix is just a little different for each business. And that’s really the point.
Restaurant success in 2025 will go to those who stop wasting time and money posting on ineffective channels and get in front of the right customers by using the channels that work best. This points to one of today’s prevailing restaurant technology trends – using social media marketing management tools to pick and deploy the best social media channels for your restaurant’s unique needs, brand, and target demographic.
The hospitality industry is transforming around countless new restaurant technology trends such as cloud-based POS systems, mobile ordering apps, and AI-powered customer service tools. When it comes to building out your restaurant tech stack, you have a ton of options.
Obviously, it’s great to have options. But it can also be a bit overwhelming. Fortunately, help is available.
Enlist qualified experts for help navigating the complicated landscape of restaurant tech. One key to restaurant success in 2025 will be finding the right balance between what you can handle yourself and what you’ll need third-party help with. A qualified consultant can help you find that balance.
The right support services can help you look at your operation and identify areas where implementing technology can improve efficiency, customer experience, and cost management. A consultant can also help you identify reliable and affordable third-party vendors to obtain the tech that will help you succeed.
Working with specialized companies can be a great way to access cutting edge restaurant technology trends that may be too costly, cumbersome, or disruptive to implement in-house
At Back of House, we’ve worked to nurture partnerships with the very best providers across the industry. Contact our expert consultants today to discuss your options and get started on the path to restaurant success in 2025.