Sales and Traffic Forecast Insights
We have crunched the numbers and are ready to reveal our forecasts in traffic and sales growth for 2025.
As we’ve affirmed regularly over the last few months, we are seeing a modest upward swing in restaurant industry performance. We expect this to continue 2025 will, according to our projections, be a better one for restaurants than 2024.
However, the improvements are unlikely to be huge.
For context, when looking at the data going back 6 or 7 years, the average annual loss in same-store traffic has been 2.4%.
So we expect 2025’s traffic numbers to be on par with recent years, but more importantly better than 2024.
We have listed the mid points as our projection in the table below.
However, our range – as things stand – point to a traffic loss in restaurants. That loss is expected to range from -3.4% to -2.4%.
This aligns with typical annual trends, while sales may hover around flat to slightly positive.
Essentially, a worst case scenario would be consistent performance with 2024 (according to our latest numbers) with a best case scenario of being in more line with the five-year average (excluding Covid).
Of course, these are subject to change as the broader numbers driving our model (laid out below) are potentially revised over time.
How BBI Develops a Reliable Forecast Underpinned with Real Data
The key thing to note about our forecasts is that they’re based on historic restaurant industry data over a number of years.
They’re not based on big events as the impact of these is difficult – we would argue impossible – to predict accurately.
Instead, we prefer to look at long-term trends that generally account for significant external events that cause economic and market fluctuations. Some market volatility is inevitable.
However, we believe a long-term view of historic performance will account for these.
With that being said, you’ll note we exclude Covid from our analysis because it was an extreme and unique anomaly.
Macro Factors We Build Into Our Model
The macro factors we build into our model have been statistically proven to have the most direct relationship with restaurant traffic and sales based on our long-term historical data. We extensively research external 2025 projections from numerous sources for each of these factors to arrive at accurate predictions for each of them. We then feed these numbers into our model.
These individual projections then collectively combine to ultimately provide the restaurant traffic and sales prediction we deliver.
- Real disposable personal income
- Although the 5-year average (excluding Covid) is at 3.6% increase Y-o-Y, we predict a -1.6% decrease in real disposable income in comparison to this number.
- This is due to many factors including, but not limited to, rise in debt, rise in inflation, and behavioral changes in consumers becoming more budget conscious overall.
- Thus, our research leads us to expect real disposable income to sit at around 2.0% in 2025.
- Real consumer spending YOY
- With the 5-year average (excluding Covid) being at 2.5%, we predict a -0.5% decrease on this number in real consumer spending YOY due to the same reasons listed above.
- Thus, we are expecting to see real consumer spending to sit around 2.0% in 2025.
- Difference in Price Inflation: restaurants v.s grocery
- Inflation has been a huge talking point for the last few years. However, the impact has not been consistent between restaurants and grocery costs.The 5-year average (excluding Covid) sits at 1.3%.
- Based on all of the external 2025 projections analyzed, We predict a 0.7% difference in price inflation between groceries and restaurants.
- Unemployment rate
- The 5-year average (excluding Covid) is 3.8%.
- Based on forecasts we are seeing for 2025, we projected this number to rise to 4.0%.
Key Takeaway for Restaurants
Our forecast is pointing to a better year than 2024, but not the best of years by any means.
So what do restaurants prioritize to thrive and get guests returning in 2025?
Based on our data, the path to better performance lies in understanding and acting on guest feedback.
Consumers prioritize the basics: friendly service, flavorful food, and consistent experiences.
And restaurants that excel in these areas historically are in the best position to outperform.
Moreover, those who keep up to date with the latest industry trends can strategize based on these customer trends.
Interested in more data forecasting?
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