• by Teresa Buyikian , January 9, 2025

Employee hiring and retention, increasing store sales and mitigating rising food costs are restaurant operators’ top priorities entering the new year, per Restaurant365’s recent State of the Industry 2025 report.

The annual study, released late last month by the restaurant management platform, was conducted with restaurant leaders representing more than 6,200 locations across the country.

As for 2024, participants unsurprisingly reported soaring food and labor costs. Eighty-eight percent  faced rising staff expenses, many due to increases in the minimum wage in some states for fast food workers. Food was a close second concern, with 86% reporting an increase in food costs.

The increase in staffing expenses trickled down, resulting in 59% of respondents reporting labor challenges led to “operating below full capacity.” The impact of rising food costs was that nearly 61% of respondents adjusted their menu prices, resulting in the 2024 meal deal boom.

Yet despite all these costly hurdles in 2024, restaurants still brought in more cash than ever before. Per the report, total restaurant sales topped $1 trillion for the first time in recorded history.

Restaurant operators want to keep this upward trend going, with 55% of those surveyed saying that “increasing sales” was their top priority for 2025, followed by cutting costs and enhancing guest experiences. Operators do intend to invest the largest chunk of their budget (36%) on marketing technology, promotions and loyalty programs.

Operators expect more sales to come from delivery and takeout, and even more so from third-party delivery services such as UberEATS and Grubhub. Thirty-four percent expected even more takeout and delivery in 2025, with 24% expecting less frequent dine-in visits. Working with third-party delivery providers is now the norm for operators, with nearly half of respondents reporting these delivery services account for between 11% and 30% of their revenue. 

But the top challenge for 2025 was predicted to remain on employees, with 32% citing recruitment and retention as the top difficulty they expected to face. Seventy-seven percent predicted labor costs will continue to rise as well. 

Food was a close second again for 2025, with 27% most concerned about rising food costs, and 82% expecting prices to keep increasing.