Will pent-up demand fuel restaurant sales this year? The National Restaurant Association thinks so.
The trade group said on Thursday that it expects total foodservice sales to hit $1.5 trillion in 2025, thanks to steady growth across all segments.
That would be up 4.1% compared with 2024, according to the association. Factoring out inflation, however, the growth is just 0.3%, suggesting a continued competitive market for consumers’ dining occasions.
The bulk of that $1.5 trillion is expected to come from traditional restaurant sales, which are expected to top $1 trillion on their own for the second straight year. The association expects total sales from restaurants and bars to hit $1.1 trillion in 2025.
Full-service sales are expected to be $533 billion, the association said. Limited-service sales, meanwhile, are expected to be $532 billion. Bars are expected to generate another $38 billion.
The remaining $400 billion in sales will come from foodservice operations at hotels, retailers, schools and sports stadiums.
Restaurant operators themselves are cautiously optimistic about their expected sales this year, while acknowledging competitive realities.
More than 80% of operators expect their sales to remain the same or improve this year, with 41% expecting improvement and the same percentage expecting steady sales. Just 18% of operators expect their sales to decline. Limited-service operators are slightly more bullish on sales than their casual-dining counterparts.
But they also expect more competition, with all but 5% of respondents saying they expect competition levels to remain the same or intensify. Nearly half, 48%, of restaurant operators told the association that they expect more competition in 2025.
The association suggests that consumers have pent-up demand following a year or two of eating out less frequently.
More than 80% of adults said that they would order delivery from a restaurant more often, or eat at a full-service restaurant more often, if they had the money. Three-quarters said they’d eat out more often at a quick-service restaurant if they had the money.
Millennials in particular appear to have some unleashed pent-up demand, with 89% saying they would order delivery or eat at sit-down restaurants more often if they had the money.
Labor remains a key challenge for operators. Labor costs and recruitment/retention were the top two concerns among full-service operators—though limited-service operators listed food costs as their top concern. Labor costs, however, were mentioned as a general concern by 95% of all operators surveyed, according to the report.
Value is expected to be a major theme this year, also. More than half of all restaurants have added new promotions or value offers last year and 47% said they plan to add new value offers this year. Sixty percent of limited-service restaurant operators added new value offers at some point last year, the association said.
They also said the offers did their job. Forty-five percent of quick-service operators said they had good luck with value or combo meals, according to the association.
Full-service restaurant operators were more circumspect: Only 11% of casual-dining operators said they found success with value offers last year, for instance.
Nevertheless, consumers are still looking for value. Eighty-two percent of customers ordering delivery said that value-based promotions are important when they order. Seventy-five percent of quick-service customers said value is important.
One of the most successful ideas last year was the loyalty program. According to the association, 76% of limited-service operators said their loyalty program helped boost traffic last year.
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