Food and labor costs increases continue to plague restaurant leaders, with 88% experiencing rising staff expenses compared to 89% in a study last year.
That was among the findings of Restaurant365’s annual industry study, according to a press release. Restaurant365 is a back-of-house accounting, inventory, workforce management and payroll solution developed specifically for the restaurant industry.
For those with rising labor, 51% reported a 1% to 5% increase, 41% experienced a 6% to 14% increase and 8% saw labor costs rise more than 15%. The most significant impact was on restaurants’ ability to achieve their maximum potential, with 59% of respondents saying labor challenges led to operating below full capacity.
For food, 53% reported a 1% to 5% jump, 37% saw a 6% to 14% increase, and 10% saw a more than 15% rise. The primary response was menu price increases, with nearly 61% of respondents adjusting prices to cope with the new reality.
“For more than a decade, Restaurant365 has partnered with operators nationwide as they turned challenges into growth opportunities thanks to innovation and perseverance,” Tony Smith, Restaurant365’s CEO and co-founder, said in the press release. “As the second largest employing industry in America, it’s no wonder labor is the top concern for our industry. We remain committed to investing and developing our platform to help restaurants across America employ millions while also keeping food costs in check and boosting their sales.”
Operations in 2025 are expected to be up and down, according to the survey.
More than half of those surveyed, 55%, said increasing sales is 2025’s top priority, followed by reducing costs and enhancing guest experiences. Costs, however, will remain a challenge, with 82% of respondents expecting food costs to increase and 77% predicting rising labor expenses.
To combat revenue challenges, 36% of leaders said their top investments would be in enhanced sales and marketing technology, promotions, and loyalty programs, alongside 27% who are planning staff investments, including enhanced training, salaries, recruitment and benefits.
Fifty-eight percent of respondents said they provide one to two hours of training a week, with the majority of time (45%) happening shoulder-to-shoulder and 21% completed on digital platforms.
For shifting consumer preferences, 34% expect more takeout and delivery in 2025, 28% expect greater demand for healthier options and 24% expect less frequent dine-in visits. How leaders meet these needs will become increasingly important, as nearly half of respondents said third-party delivery services account for between 11% and 30% of revenue.
