The first weeks of any new year are rife with prognostications about what’s to come during the next 12 months. So I figured, why not join the fun?

Prediction #1: Maximizing unit economics will remain the biggest objective for all concepts.

This is the easy prediction, since it is true of every year. Keep in mind that in this instance, economics refers to both sides of a company’s profit and loss statement; the sales and the cost of sales.

Prediction #2: Labor will remain operators’ biggest concern.

What makes labor a bigger issue in 2025, though, is that it represents a continually increasing expense. Higher labor costs also shape the previous predication as well as the next one.

Prediction #3: Due to the prior two realities, automation will continue to make headway.

The rising cost of labor will continue to fuel the drive toward greater automation. I am not sure about robotics making a lot of practical headway in 2025, though. Keep in mind that some differences exist between automation and robotics. Specifically, automation can take on many forms as discussed here. Robotics, in contrast, is but one form of automation. The two main challenges automation faces are possible customer negative reactions and the cost of repair and maintenance.

I would say that the most impressive news in the area of automation is Sweet Green’s Infinity Kitchen. The chain has coupled its production-oriented, back-of-house innovation with kiosks, which enhances the impact of both efforts by positively impacting many facets of unit economics including labor, service, peak throughput, product and experience quality and accuracy among others.

Prediction #4: Concepts will continue to fine-tune their use of technology to manage labor more accurately.

Let’s take a closer look at the potential financial impact on labor. This table shows the yearly (simple math) cost of one hour of labor per day at different hourly rates:

At five hours of labor savings per day and $20 per hour in labor cost, a rate many municipalities require as the minimum wage as of 2025, a concept can afford to invest more than $100,000 in these forms of automation and get a solid return on investment in less than three years.

In the meantime, as automation becomes more mainstream, the real impact comes in optimizing how the concept manages labor. While operators must manage labor more tightly to control costs, this must not happen in such a way that it negatively impacts customer service. One way to deliver the best customer service is to objectively understand how much labor is necessary to deliver on the brand promise.

Many restaurant chains still run on financial metrics, rooted in the store operating profit they would like to generate, using empirical information that usually comes from internal benchmarking of the best labor operators to push the labor costs to as low as possible. This approach can work short term but is not sustainable long term, especially as managers turnover and concepts continue to change their menus to offer customers fresh food. I always remind concepts that no two menu items require the same labor amount, even if they are sold at the same price. A much better approach is to use an activity-based labor system, which applies a key industrial engineering technique of time and motion, and the restaurants get the labor that they need to deliver the best customer service, based on the time it takes to do each activity.

Shift management and labor scheduling, also play big roles in streamlining labor. Having actual activity-based information, along with other operating parameters (e.g. shelf life of product), plays a critical role in being able to more objectively manage shifts. In addition to following an activity-based labor system, look for ways to reduce opening hours and closing hours by shifting the tasks being done during these time periods into the day’s sales valleys. This represents one basic way to reduce labor hours, without impacting the guest experience. But to optimally do this, you need to know the time it takes to do the activity.

I am optimistic about what 2025 will bring foodservice concepts, as well as all of us who work in this great industry. All the challenges we have faced over the last many decades have led to many solutions. So, my fifth prediction is that this evolution will continue, and as is the case with any adversity we face in our industry, makes us stronger and more eager to get on with it.

Here’s to a great 2025!