The Restaurant Industry 2025 Q1 Snapshot Webinar by Black Box Intelligence shared important insights.

We covered sales, consumer trends, workforce challenges, and what to expect in 2025.

Here are the biggest takeaways from the discussion.

1. The Restaurant Industry is Slowly Recovering

The good news? The restaurant industry is starting to bounce back.

• In 2024, sales stayed flat (0% growth), and traffic was down 2.8%.
• But the second half of the year showed signs of improvement, with sales increasing 1.2% in November and December and traffic improving to a 1.3% decline.

This means momentum is building for a stronger 2025.

2. Who Is Doing Better Than Others

Not all restaurant markets performed the same.

• Dallas, Houston, and Phoenix did better than most cities.
• Los Angeles, Orlando, and Tampa struggled with lower traffic.

Local economies, natural disasters, and population shifts all played a role in these differences.

Meanwhile, among restaurant types, Quick Service (QSR) and Fast Casual performed the best in 2024:

• QSR grew sales by 1.71%.
• Fast Casual also saw small growth.
• Casual Dining and Fine Dining struggled as customers chose cheaper options.

With inflation, dining out more expensive.

Additionally, many people traded down to more affordable restaurants.

3. Consumer Insights

Higher-rated restaurants (4.2+ stars) generate significantly more revenue than lower-rated ones, showing the financial power of online reputation.

However, improving ratings requires identifying actionable insights—whether operational, workforce-related, or market-driven. Black Box Intelligence is launching Performance Intelligence this quarter.

We are so excited about this for a few reasons…

• This will help operators move beyond fragmented data and gut instincts by providing a clear, data-driven roadmaps
• It combines sales, guest experience, and workforce insights with industry benchmarks.
• The newly released Top Focus Points tool pinpoints key drivers of customer satisfaction by analyzing guest sentiment, allowing brands to prioritize improvements that have the biggest impact.

Recent data reveals that 58% of restaurants using BBI Guest Intelligence tools improved their ratings.

That’s compared to 38% that did not.

4. Workforce Insights

Firstly, let’s discuss how hourly workers are staying longer, but managers are quitting.

The good news? Fewer hourly workers are leaving their jobs. Better pay, benefits, and schedules have helped.

The bad news?  More restaurant managers are quitting, which causes problems with training, customer service, and restaurant operations.

When we look to California as an example, turnover in fast food jobs has dropped to almost the same level as sit-down restaurants (68% vs. 60%).

This is likely due to the minimum wage increase to $20 per hour.

Meanwhile, after years of fast wage growth, pay increases are starting to slow down.

• Fast food workers got only a 1% pay raise on average.
• Full-service restaurant workers got 3% raises for new hires and 2% raises for existing employees.

General Managers in full-service restaurants are finally making more money, with total pay increasing 4.5%.

But fast food GMs fell behind, with only a 2% pay increase, which didn’t keep up with inflation.

5. What’s Coming in 2025?

Experts predict a better year for restaurants.

• Traffic should improve, with only a 2.2% decline instead of last year’s 2.8%.
• Sales might even turn positive in 2025 as customers start dining out more.

However, inflation, economic policies, and global events could change things quickly. Restaurants need to stay flexible.

Final Thoughts

There has been many big challenges the Restaurant Industry 2025 Q1 has faced, but things are looking better for 2025.

The key to success this year will be offering great value, improving guest experience, and retaining employees.

By focusing on what matters most to customers, restaurants can build a strong foundation for growth.

Every quarter we provide the definitive breakdown of the state of the restaurant industry. You can register for each of these sessions for the rest of 2025 now.