Dive Brief:
- The traditional restaurant industry is expected to post sales of over $1.1 trillion in 2025, a year-over-year increase of 4.1%, according to the National Restaurant Association’s State of the Restaurant Industry 2025 report released Thursday. Sales from the full-service, limited service and bars and taverns make up the bulk of the total $1.5 trillion in sales the NRA expects for the entire restaurant and foodservice industry.
- While this growth prediction is in the single-digits, it marks a nearly 82% increase in sales from 2020, when annual eating and drinking places sales reached $605 billion. This segment surpassed $1 trillion in sales for the first time in 2023 and has stayed above that level since.
- Despite sales momentum, restaurants are still facing significant challenges. Sixty-one percent of operators said traffic declined between 2023 and 2024, per the report. Over one-third of operators said their restaurants weren’t profitable last year, and over half said they were still carrying debt from the pandemic.
Dive Insight:
Industry experts are cautiously optimistic about the restaurant industry this year, predicting that consumer demand will hold steady and lenders will be more willing to finance restaurants. This optimism is reflected in the NRA's report, with 41% of all restaurants surveyed expecting sales to be higher this year, and another 41% expecting sales to be about the same as 2024.
“The fundamentals of the restaurant industry are strong, and operators are optimistic about the year ahead,” said Michelle Korsmo, NRA president and CEO in a statement. “Growth will come from restaurant operators finding the balance of value and experience for consumers, and innovating breakthrough efficiency in their operations.”
Restaurant and foodservice sales from 2020 to 2025 (in billions)
Operators also expect competition to remain strong — 48% forecast increased competition this year across the restaurant industry, and another 47% predict competition will remain the same.
“Many restaurant operators anticipate their 2025 challenges will be similar to 2024,” the report said. “Labor costs, food costs, and recruiting and retaining employees are among the top challenges that both full-service and limited-service operators expect to face in 2025.”
Consumer demand does remain strong, however, and a majority of adult diners plan to order delivery (82%), eat at a tableservice restaurant (81%) or eat at a quick-service restaurant (76%) in 2025, according to the report. The NRA said this is good news, especially since a bulk of restaurants are focusing on building their on-premise channels.
“Nine out of 10 people enjoy going to restaurants, and restaurant operators understand what it takes to keep that experience positive,” said Korsmo. “Operators are adapting to meet today’s consumers’ wants and needs with an eye to economic pressures, regulatory changes and rising food and labor costs.”
