2025 Outlook: Experts Weigh In on Restaurant Trends and Challenges, Part Two

Modern Restaurant Management (MRM) magazine asked restaurant industry experts for their views on what trends and challenges owners and operators can expect to see in 2025. To read the first part, click here. 

Restaurants will continue to invest in comprehensive Back-of-House Technologies

Following the pandemic, restaurants focused heavily on Front-of-House technology to streamline and digitize the diner experience. While features like ordering and paying via QR codes have become the norm, Back-of-House systems have lagged in sophistication. In 2025, we’ll see operators increasingly adopt advanced Back-of-House solutions to gain deeper insights and more precise control over profit margins. As economic pressures and fluctuating food costs persist, these technologies will be critical for maintaining profitability and ensuring long-term sustainability. 

Automation + Analytics

Automation and AI will play a bigger role in restaurant back-of-house operations in 2025 as restaurants look to make processes efficient across the board.

Automation looks like a lot of things, but for kitchens, this means introducing robotics into the kitchen – augmenting, not replacing, the work of employees. Robots in the kitchen have gotten a bad reputation, but people are realizing the technology is truly as simple as a machine that can do a simple task. For example, look at Chipotle – they started rolling out robotic technology like automated avocado slicers into their kitchen to cut down time on manual labor and cut costs – while keeping their employees involved in the process. 

I think 2025 will be the year restaurants focus on turning insight to action through integrations.

Even though AI tools can’t peel an avocado or make rice balls for sushi, AI definitely will be entering the kitchen more in 2025. From inventory management to predictive labor scheduling, AI tools will help restaurants cut costs and adapt in real-time, while providing operators valuable data to help inform business decisions. Many operators have a wealth of data but aren’t putting it to work. I think 2025 will be the year restaurants focus on turning insight to action through integrations. APIs, like those opened by Toast, are becoming critical to ensure systems—whether for sales, inventory, or payroll—“talk” to each other, allowing operators to get out on the floor while being accurately informed about their business.

Challenges

Looking to next year, we really don’t know what’s going to happen to the restaurant industry. I think that the biggest challenge ahead is the unknown, especially when it comes to labor and economic policies that directly affect the work we do every day as an industry. To manage through this, restaurants should hone in on where they can drive efficiencies across their operations to set themselves up for success in the face of uncertainty. That being said, I remain optimistic that we will see many benefits when businesses are able to get back to what truly matters – providing their guests with great food and a great experience.

– Bo Davis, CEO and co-founder, MarginEdge

As we look ahead to 2025, we anticipate the drive-thru beverage space will continue to be shaped by macroeconomic factors, compelling customers to prioritize value and positive experiences more than ever. This is why it’s essential that operators invest in comprehensive training programs and foster a positive work environment. A well-trained, motivated workforce is the cornerstone of exceptional service and high-quality products – two factors that are critical to generating customer loyalty. In the new year, we’re looking to increase our personalization capabilities to deliver an experience that’s not only positive, but intuitive, and keeps customers coming back for more.

 – Chris Dawson, 7 Brew President

For 2025, we’re likely to see a significant shift in the restaurant industry driven by the popularity of new drugs like Ozempic, Mounjaro, Trulicity and Wegovy. These medications are changing consumer eating habits given reduced levels of appetite. Restaurants will respond by cutting back portion sizes and adjusting prices accordingly—something we haven’t seen in decades. This strategic shift can attract a new wave of health-conscious customers and, surprisingly, may boost overall revenue as smaller portions allow for creative menu diversification, reduced food waste, and better customer satisfaction. Restaurants that adapt quickly could find themselves in a prime position to capture this emerging trend.

For 2025, we’re likely to see a significant shift in the restaurant industry driven by the popularity of new drugs like Ozempic, Mounjaro, Trulicity and Wegovy.

The restaurant problem people  on these drugs present is they go out to eat and can’t finish their entrees because of the portion size.  While some may get a “to-go” bag a large majority would skip the restaurant rather than pay a premium for something they can’t eat or could cook at home. 

Eco-Friendly (another thought) 

I think generationally also we can add the emphasis on eco-friendly. Younger generations are increasingly favoring restaurants that prioritize sustainability… local sourcing, reducing food waste, energy efficient operations.  

The other element would be plant-based foods. Restaurants already started offering impossible foods dishes, a trend likely to increase. 

– Mike Ford, CEO of Skydeo

Gen Z is the Driver

Gen Z’s influence on the restaurant world — in particular regarding marketing — is driving a push toward more personalized, value-driven, and health-conscious experiences. This generation demands tailored interactions, from app-based loyalty rewards that recall their preferences to menu customization options that make dining feel uniquely personal. 

Value is crucial, but it’s not just about low prices—Gen Z expects quality meals that justify the cost, favoring options like meal bundles and exclusive deals that deliver both affordability and a great experience. I've seen health and wellness are equally important with this generation, with a preference for transparent ingredient sourcing and the ability to customize meals to dietary needs, such as plant-based or allergen-free. I think restaurants will continue to evolve their agility with tech-integrated experiences as well as authenticity in their marketing – emphasizing sustainability, quality, and experiences that resonate with this values-driven demographic.

– GiftAMeal CEO Andrew Glantz

Looking ahead to 2025, we see a massive opportunity in the 80% of transactions that are still offline. The key isn't just about driving digital adoption – it's about capturing every transaction, digital or not, to enable our mission at Olo: Hospitality at Scale™. As guests shift expectations and competition increases, we think restaurants will continue to embrace data-driven interactions to elevate the guest experience.

While digital transactions are growing, the real transformation will come from restaurants' ability to leverage both known and unknown guest data to create more personalized experiences.

While digital transactions are growing, the real transformation will come from restaurants' ability to leverage both known and unknown guest data to create more personalized experiences. Through powerful Guest Data Platforms and analytics solutions, restaurants can gain insights into menu performance, purchasing behaviors, and trends that drive profitable sales.

The restaurant of the future we're working toward is one where technology and data work together to create an ecosystem where every guest interaction is personalized and meaningful – whether they're ordering through an app or dining in. It's about bringing tomorrow's technology to restaurants today to help them do more with less while making every guest feel like a regular. We hope to see more restaurants working towards this vision in 2025.

– Noah Glass, CEO, Olo

2025 Predictions

The restaurant industry is entering a new era where sustainable growth depends on earning true customer loyalty through convenience, relevance, and a focus on maximizing lifetime value. Brands that make data-driven decisions to deliver personalized experiences at every touchpoint will win. Those who fail to evolve beyond transactional rewards programs to build meaningful, long-term guest relationships will continue to struggle.

Profitable growth becomes non-negotiable 

The era of “growth at all costs” is over. Rising costs and higher interest rates are forcing restaurants to focus on sustainable unit economics and corporate-level profitability. Careful operational improvements—like labor optimization, menu engineering, and cost control—will replace debt-fueled expansion as the key to growth.

Rising costs and higher interest rates are forcing restaurants to focus on sustainable unit economics and corporate-level profitability.

Digital experiences must drive real value

Technology, for its own sake, won’t cut it. Restaurants will demand tools that streamline loyalty enrollment, enhance online ordering, and automate time-consuming tasks. The winners will focus on technologies that solve real operational challenges and improve the guest experience, ensuring a clear return on investment.

Guest data drives competitive advantage

The brands that thrive will use guest data to deliver personalized experiences and make smarter business decisions. This goes beyond marketing — from menu optimization to real estate strategy, data will separate winners from losers in an increasingly competitive landscape. We're seeing early signs of brands successfully balancing third-party reach while building profitable direct ordering channels, recognizing that marketplace dependency limits margins and guest relationships.

The bottom line for 2025: In 2025, restaurants will need to focus on sustainable growth by using guest data to drive smarter decisions, building stronger direct relationships with customers, and creating loyalty as a business outcome. Success will depend on investing in technology and operations that deliver clear value and help brands adapt to a rapidly changing landscape.

– Zach Goldstein, CEO and Founder, Thanx

Challenges Facing Independent/Small Restaurants Heading Into 2025

Independent small restaurant owners are facing a number of challenges as we head into 2025 including the residual effects of the inflation spike of 2021 and 2022, elevated cost of capital due to a higher interest rate environment, and a low unemployment rate which means a tight labor market for those looking to add staff.  While the economy seems to have achieved the soft landing that the Fed has worked to engineer and employment remains strong, small businesses must contend with elevated interest rates, a tight labor market, and judicious customers who are still upset by the significant runup in prices over the past several years.

In addition, many independent restaurant owners are finding it difficult to compete with the growing economic power of national restaurant groups.  National restaurant chains provide many benefits to their franchise owners including, access to lower-cost capital, discounted pricing on food products and other supplies, strong brand recognition, and national marketing campaigns that drive business to the franchise.  These benefits can create considerable advantages for franchise restaurants, making it difficult for local competitors to compete.  However, the appeal of a local restaurant is often found in the attributes that make it different from a chain, such as its unique menu, attractive ambiance, or charismatic waitstaff.  We find that many local restaurants are able to secure a high level of customer loyalty and are able to command premium pricing over many franchise restaurants as a result.

How the Trump Administration Impact Restaurants

President Trump’s economic plan centers around making the tax cuts from his first administration – which are set to expire in 2025 – permanent.  He has also proposed eliminating federal income taxes on tips and overtime.  These policies are likely to appeal to restaurant owners and workers alike, as well as to other small business owners in the service industry.  Afterall, nearly everyone likes tax cuts.  However, tax cuts on overtime and tips could create perverse incentives by encouraging “binge working,” and encouraging businesses to incent patrons to increase their tips while adjusting listed prices downward.  Given the arbitrary nature of tipping, and the fact that unconscious biases can impact the tips an employee receives, wages that are heavily based on tipping can create less economic stability for employees in the long run.

Automation will make businesses less dependent on a tight labor market and may allow these businesses to continue to grow without needing to hire, ultimately leading to greater overall profitability.

In addition, President Trump’s policies on immigration have the potential to make an already tight labor market even tighter.  This would likely be a positive for employees who could see wage increases should the supply of undocumented labor be reduced, but it could create challenges for small businesses owners already struggling to find quality workers at wages they can afford.

Finally, President Trump’s proposal to dramatically increase tariffs on Chinese imports while imposing smaller tariffs on other trading partners could be a very disruptive force to the global supply chain.  While over the long run these tariffs would likely drive some manufacturing back to the United States, in the short-run small businesses that import goods from abroad would need to reorganize their supply chains to source the most affordable goods while passing on the higher cost of these tariffs to their customers.  U.S. exporters, especially those in the technology and agricultural fields, would also likely face retaliatory tariffs on their goods, driving down demand from abroad.

Overcoming These Challenges in 2025

Small businesses should be examining their supply chains to understand how much they depend on foreign imports, and especially goods sourced from China. They should examine their options for sourcing these goods domestically, and may choose to become more vertically integrated, manufacturing a greater portion of their product themselves.

Small business owners should also consider investing some of their tax savings in the automation of manual tasks. Automation will make businesses less dependent on a tight labor market and may allow these businesses to continue to grow without needing to hire, ultimately leading to greater overall profitability.

– Ben Johnston, COO of Kapitus 

As cyber threats grow and regulations evolve, security and compliance are becoming critical priorities for restaurant operators. Adaptable POS systems will play a pivotal role in safeguarding sensitive customer data while ensuring compliance with changing laws like PCI DSS updates and data privacy mandates. Restaurants need solutions that offer robust encryption, tokenization, and proactive threat detection to protect against breaches. At the same time, these systems must be flexible enough to adapt to emerging requirements without costly overhauls. Forward-thinking POS providers will deliver technology that keeps restaurants ahead of risks and regulations, offering peace of mind and operational continuity.

– Peter Kellis, CEO, TRAY

Looking ahead to 2025, what we’re seeing as a leading provider in the U.S. Asian foodservice industry is the growth and proliferation of fusion style restaurants and menu creations, blending Asian cuisine with more traditional concepts. There offerings are starting to take off, and we believe their growth will accelerate in 2025.

Foodservice providers that can easily offer options that seamlessly integrate with existing concepts will have great success, especially companies like ours that are digitally transforming how we work with customers.

Importantly, quick-service offerings will also have a major role as customers will continue to prioritize convenience. With expanded and more dynamic customer preferences, restaurant owners and chefs have their hands full. Foodservice providers that can easily offer options that seamlessly integrate with existing concepts will have great success, especially companies like ours that are digitally transforming how we work with customers. We want working with us to be as easy as possible for owners and operators to get the highest quality Asian cuisine without any hassle. 

– Felix Lin, Interim CEO, President and Chief Operating Officer of HF Foods Group Inc.

As the largest dual-sided marketplace for restaurant financing and rewards, inKind partners with thousands of restaurants across the U.S., gaining unique insights into evolving consumer preferences. While 30 percent of restaurants close in their first year, less than one percent of inKind-funded restaurants do—a testament to their expertise in driving long-term success. One emerging trend for 2024 that’s set to define 2025 is the shift from traditional nightlife and big-box dining to immersive, quality-focused experiences prioritizing ambiance and exceptional food.

The Decline of Traditional Nightlife and Big-Box Chains

• With the nightclub scene declining, consumers are moving away from high-cost, exclusive spaces and embracing restaurants that offer both high-quality food and a curated social experience. This shift away from nightclubs, along with the aging of big-box chains such as TGI Fridays and Denny’s, signals that consumers want more from their dining out experiences. Today’s diner, inspired by the level of sophistication showcased on social media, cooking shows and food media, has developed a higher standard for food quality, demanding fresh, unique options that balance value with experience.

The Rise of Quality-Centric Chains and the Power of Vibe Dining

• This changing tide has benefitted both the high-quality independent restaurants and chains that emphasize superior ingredients, presentation, and atmosphere. Chains like Cheesecake Factory, which maintain high food quality standards, have thrived by refusing to compromise on quality, proving that American diners will consistently pay more for a guaranteed experience. Likewise, establishments like Nobel 33’s Toca Madera and Medusa Miami—popular "vibe dining" spots—are seeing unprecedented demand, boasting packed reservations every night.

– inKind’s CEO, Johann Moonesinghe

The restaurant industry is poised for a shift in 2025, moving from flashy technology to prioritizing practical, integrated solutions that drive real results. At Portillo’s, we’re already witnessing the power of thoughtfully connected systems—digital menu boards, self-service kiosks, and AI-assisted staffing tools seamlessly working together to streamline operations and elevate guest convenience.

In 2025 we anticipate this trend of "smart integration" to gain momentum across the industry.

In 2025 we anticipate this trend of "smart integration" to gain momentum across the industry. Restaurants will prioritize technology that solves real operational challenges—such as optimizing labor, enhancing order accuracy, and increasing speed of service—while delivering a more personalized and engaging guest experience. In the future, the focus will be on tech that not only enhances efficiency but also ensures that innovation aligns with the evolving expectations of today’s diners.

– Portillo’s

In 2025, restaurants face evolving policy shifts and rising competition. Operators need better ways to stand out and improve the customer experience. By leveraging technology to streamline and automate operations in the back of house, brands can focus more extensively on the front of house, driving better customer experiences while improving margins.

– ResQ founder and CEO Kuljeev Singh

At American Seafoods, over the next year, we fully expect restaurants to feature more menu options that are convenient for operators, greener for our planet and of the utmost quality for guests. Wild Alaska Pollock, the most climate friendly protein in the world, is a great example of a convenient product that restaurants can look to that will keep customers hungry for more. Not only can it be quickly prepared, but it is a versatile ingredient for many different menus that is also uniquely affordable.

I would also say that restaurants should pay close attention to the seafood category in 2025. Seafood represents approximately 17% of the world’s protein intake and is the primary protein source for approximately three billion people – nearly half of our planet. As customers pay more attention to where their food comes from and what it does for them health-wise, the demand for seafood at restaurants will surely continue to surge.

– Rasmus Soerensen, Chief Commercial Officer of American Seafoods

In 2025, data will become the new jet fuel of every successful restaurant, driving decisions that lead to profitability and growth. As the point-of-sale system evolves into a complete restaurant operating system, it will empower operators to use real-time insights to understand guest preferences, manage costs, and optimize operations. Restaurants that embrace this level of sophistication in data use will be positioned to exceed profit expectations, no matter the market challenges. 

As the point-of-sale system evolves into a complete restaurant operating system, it will empower operators to use real-time insights to understand guest preferences, manage costs, and optimize operations.

2025 will bring significant challenges and opportunities for restaurants as changing consumer behaviors push operators to rethink their strategies. Two in particular we're tracking are declining alcohol orders and fewer desserts. To maintain profitability, restaurants must focus on innovative approaches, like guest friendly ways to speed up table turn times such as handhelds and ways to improve kitchen efficiencies via tools like Kitchen Display Systems. At SpotOn, we're dedicated to empowering operators with actionable insights so they can adapt swiftly to these shifts. By streamlining data into easy-to-digest formats, we’re giving restaurant owners the tools to make informed, profit-driving decisions, saving them time and keeping their focus on what matters most—their guests.

In 2025, AI will become an essential tool for restaurants striving to do more with fewer resources. The key will be using AI strategically to uncover revenue opportunities, streamline operations, and better understand guest behavior—without compromising the human touch that defines hospitality. We’re committed to developing 'invisible' technology that supports operators in delivering an exceptional guest experience, making AI a quiet but powerful force for profitability.

– Bryan Solar, Chief Product Officer at SpotOn

Trends for 2025 QSR Coffee

• Bringing back the personal touch will be a big focus to create community and engage loyal customers. For the brands that have always had a key focus on personal touch, that aspect has never left but for brands that are aiming to improve their personal approach (Starbucks bringing back the handwritten note with sharpies, etc), the effort is noble but I wonder how genuine it is over time. 

Focusing on value adds rather than discounts will be big in QSR in 2025.

• Focusing on value adds rather than discounts will be big in QSR in 2025. The two things that customers value the most are a) An incredible experience, and b) A fast transaction (or at least one that moves fast even if demand is high).  For value adds, I do think it's noteworthy that Starbucks is aiming to win customers back by not charging for alternative milk (which they have historically pushed aggressively) and it will be interesting to see what value adds other market leaders come up with.

– Darren Spicer, Co-Founder of Clutch Coffee

In 2025, restaurant chains will “dig deep” and look for even more cost cutting areas. On the menu will be reducing power consumption. With quick-service restaurants among the most energy-intensive sectors, according to the U.S. Dept. of Energy, using IoT solutions to monitor and optimize energy use during peak times will save money and support greener operations.

– Tom Woodbury is an IoT solutions consultant at MachineQ, a Comcast company