Revised 2025 Restaurant Forecast
Overall, the National Restaurant Association expressed “cautious optimism” in its 2025 State of the Industry Report. President and CEO Michelle Korsmo referenced “a positive economic environment and resilient consumer demand,” while NRA data showed that more than 80% of operators headed into 2025 expected sales to be higher or at least comparable to 2024. NRA forecasted a record $1.5 trillion in sales for 2025.
Granted, the picture in January looked pretty good. According to the NRA’s Restaurant Performance Index, a monthly composite index that tracks the health of the U.S. restaurant industry in terms of both current and expected business conditions, operators’ more optimistic outlook for future business drove a modest gain over December’s level. That marked the 11th consecutive month in which the RPI remained above 100, signifying expansion in the index of key industry indicators.
By April, however, the picture had darkened, with the RPI slipping for consecutive months into contraction territory. March’s composite index of 98.9 reflected mixed results in same-store sales and traffic, but operators’ outlook for future business conditions continued to slide.
Rising uncertainty over the economy and the impact of tariffs led industry research firm Technomic Inc., too, to lower its forecast for 2025 performance. Initially expecting a 5.1% increase in total restaurant and bar sales this year, Technomic in April revised its nominal, year-over-year growth projection to a range of 2.8% to 4.2%, with anticipated real sales growth now projected at an inflation-adjusted range of 0.5% to -0.8% compared to 1.8% real sales growth expected in its earlier 2025 forecast.
Jared Cohen
State of Mind
Jared Cohen
Chief Operating Officer
Chicago
There are always going to be macroeconomic forces outside of our control, and as an emerging franchisor we remain confident about our near-term prospects and the energy we’re seeing in our initial franchising push. We’ve built a unique operating model in fast-casual, better-for-you restaurants and to some degree economic headwinds can actually be an advantage for us (e.g., our lower build cost, fewer site requirements) relative to other franchise concepts.
Overall confidence in the economy remains an area of concern for us. We’re focused domestically in terms of our immediate growth efforts, and confidence is critical both among our potential franchisees and our end customers. We’re fortunate in that customers are increasingly focused on what they put into their bodies and on improving their overall health, so these tailwinds insulate us to some degree.
Inflationary pressures have been an ongoing challenge for years, since the onset of the pandemic. We are seeing some of these pressures come down, but others, particularly those impacted by potential tariffs, are emerging as larger risks. We’ve continued to work on developing contingency plans and strategies to help mitigate these pressures. Some of these have included working with suppliers on longer term contracts, but others include rebidding certain parts of our business, identifying alternative sources/specs and value-engineering elements of our experience.
Reason for optimism: Overall, we remain confident in our path forward and our near-term growth expectations.
