A tough start to 2025 followed by uncertainty over tariffs has led Technomic to reconsider its restaurant sales projections for the year.
The data firm, a sister company of Restaurant Business, lowered its projections for foodservice sales to a range of 3.4% to 4.6%, depending on the severity of economic challenges this year. The baseline scenario is 4% sales growth.
That’s a lowered forecast from its initial expectation of a 5.1% increase in foodservice sales this year.
Adjusted for inflation, the “real sales” growth would be a 0.3% increase at the midpoint scenario. That’s down from an expected increase of 1.8% after accounting for inflation.
The foodservice data includes prepared food at noncommercial sites like schools and hospitals as well as prepared food at retailers, among others.
Technomic is less bullish on its growth projections for restaurants specifically, now forecasting sales growth ranging from 2.8% to 4.2%, with a baseline scenario of 3.5% growth. Adjusted for inflation, that midpoint would be a 0.2% decline.
Technomic came into 2025 expecting a better year overall, as easing inflation and some good sales results at major chains late last year appeared to suggest that the industry was turning a corner. Last year was surprisingly weak, weaker than many industry experts expected. Many executives hoped for better results in 2025.
But consumers appear to feel pressured by high prices, while talk of tariffs and uncertainty on Wall Street have exacerbated concerns about a potential downturn. Consumer sentiment plunged in February and March, despite signs that inflation continued to cool. The consumer price index declined 0.1% in March, according to federal data.
Several restaurant chain executives have suggested early-year sales and traffic challenges. “We’ve started the year facing some overall industry headwinds, exacerbated by significant weather events across the country,” Wendy’s CFO Ken Cook said in February.
“I think we’ve certainly seen a sluggish start to the broader U.S. industry in January,” McDonald’s CFO Ian Borden said in February.
Weather, flooding and wildfires have also played a role. Kura Sushi this week reported a 5.3% decline in same-store sales in the company’s fiscal second quarter, thanks to wildfires and flooding in Southern California in January and February and cold waves in other markets. CEO Hajime Uba said the events hurt sales by 400 to 500 basis points. He called weather an “unexpected sales pressure.”
According to Placer.ai, several big chains have seen traffic decline this year, including McDonald’s, Chick-fil-A, Jack in the Box, KFC, Popeyes, Burger King, Panera Bread, Five Guys and Wendy’s.
At the same time, several other chains have more than weathered that storm, including Top 10 chains Chipotle and Taco Bell, along with Cava and Sweetgreen. Dave’s Hot Chicken, Raising Cane’s, Panda Express, Jersey Mike’s and Qdoba were also up.
Technomic is expecting stronger sales this year at limited-service restaurants, with projections for 0.6% growth, after accounting for inflation, as a baseline scenario, driven mostly by strong expected sales at fast-casual restaurants. But that is down from an expectation of 1.8% sales growth.
Technomic had expected 1.2% growth at full-service restaurants after accounting for inflation. It now expects a 1.6% decline.
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