As the foodservice industry prepares for 2025, a convergence of factors—economic shifts, consumer behavior, and global volatility—will significantly influence its trajectory. We think it’s important to show how these variables will impact foodservice and what businesses can expect in the coming year.
Can Restaurants Stay Competitive Amid Rising Food Costs?
The Consumer Price Index (CPI) projects food prices to increase moderately in 2025, with food-at-home prices expected to grow by 1.6% and food-away-from-home prices by 3.1%. While this represents a slowdown compared to pandemic-era inflation, the disparity between at-home and away-from-home price growth could exacerbate the shift toward dining at home.
For foodservice operators, the challenge lies in balancing price increases to maintain margins while retaining price-sensitive customers. Higher menu prices could deter consumers from dining out frequently, particularly if grocery costs remain relatively stable. This trend underscores the importance of value-driven promotions to attract traffic.
Traffic Troubles: Navigating Declining Visits in 2025
Restaurant traffic is projected to decline slightly in 2025, continuing a long-term trend. Black Box Intelligence forecasts a traffic loss ranging from -3.4% to -2.4%, though sales may remain flat or see modest gains. These mixed signals suggest that while restaurants may attract fewer visits, higher check averages driven by inflation could offset volume losses .
Operators must innovate to maintain relevance, from leveraging loyalty programs to offering differentiated experiences. Emphasizing delivery and takeout services can capture fill-in demand while offsetting the decline in dine-in visits.
Commodity Chaos: Tackling Volatility in the Supply Chain
Volatility in commodity markets—fueled by geopolitical instability, natural disasters, and shifting monetary policies—poses significant challenges for food manufacturers. Wild swings in prices for sugar, cocoa, and packaging materials are forcing businesses to adopt higher price buffers, which could cascade down the supply chain to foodservice operators.
These dynamics emphasize the need for flexible procurement strategies and robust supplier relationships. Foodservice businesses should also anticipate menu adjustments to mitigate cost pressures without alienating customers.
Economic Growth Meets Rising Costs
The U.S. economy is expected to grow at an above-trend rate of 2.5% in 2025, with unemployment projected at 4.2%. Higher wages could boost disposable income, supporting household spending, including dining out. However, rising labor costs may pressure restaurant operators to adopt cost-saving technologies or reduce reliance on labor-intensive service models .
2025 Outlook: Turning Challenges into Opportunities
For foodservice operators, 2025 presents a mixed bag of opportunities and challenges. Moderate inflation, shifting consumer behavior, and economic growth create a landscape that rewards adaptability. Success will depend on balancing cost management with innovation and maintaining a strong value proposition in an increasingly competitive environment.
By proactively addressing these trends, the foodservice industry can navigate 2025’s uncertainties while positioning itself for long-term growth.
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