The Restaurant Industry 2025 Q2 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. Traffic & Sales: Momentum Slowing After Early Rebound

The industry saw a three-phase cycle over the last 12 months:

• Early 2024: Marked by a slowdown.
• Mid to Late 2024: A period of modest recovery.
• Q1 2025: A renewed slowdown, with comp traffic falling to -3% and sales growth down from 3.9% in Q4 to 0.3%.

Economic uncertainty and falling consumer confidence are now weighing on performance. This was fueled by inflation and unemployment concerns.

2. Segment Winners & Trade-Down Behavior

While quick service continues to lead in sales growth and fast casual in traffic, casual and family dining are facing headwinds. Trade-down behaviors are evident:

• Higher-income consumers remain stable.
• Middle-income diners are shifting toward limited service.
• Lower-income groups are increasingly opting for grocery over dining out.

3. Check Management & Value Perception

Consumer efforts to manage spending are reshaping behaviors:

• 62% of operators observe a shift to value/discounted offerings.
• Guests are cutting back on extras—splitting entrées, skipping drinks, and avoiding desserts.

Yet, value isn’t just about pricing. Guests prioritize:

• Great taste
• Positive staff attitude
• Consistency
• Cleanliness

4. Delivery Dominance & On-Premise Trends

Delivery continues to dominate off-premise growth, especially in limited service, now making up 12% of sales. Guests are favoring QSR and fast casual for delivery due to lower total costs, including tips and fees. Despite some seasonal upticks, full-service delivery remains minimal (2%).

5. The Review Economy: Reputation Matters

Star ratings correlate directly with loyalty:

• Guests leaving 5-star reviews are 4x more likely to return than those leaving 3-stars.
• Attitude, accuracy, and value are critical drivers behind both positive and negative reviews.

Restaurants excelling in value sentiment consistently outperform their local market peers in traffic.

6. Consistency is the New Battleground

Despite declining turnover rates, consistency remains a challenge:

• Positive mentions of consistency have dropped.
• Negative mentions are rising in both full and limited service.

This signals opportunities to revisit training, processes, and operational standards—especially as tenure and staff stability improve.

7. Workforce Trends: Turnover Down, Challenges Persist

The labor market is softening:

• Turnover is lower than 2019 for hourly roles in both segments.
• Management turnover remains high in full service.

Fully staffed restaurants enjoy a ~2–3 percentage point difference in both comp sales and traffic.

Keeping that in mind, we are also seeing wage growth is moderating, reducing pressure on labor costs for now.

Final Thoughts and Looking Ahead

Economic indicators suggest:

• Further traffic softening to around -3.3% industry-wide.
• Flat-to-slightly-positive sales as checks rise due to inflation.

If inflation or tariffs escalate, expect continued trade-downs. Quick service and fast casual would benefit, while family and casual dining may struggle further.

As the industry navigates macroeconomic headwinds, the fundamentals—value perception, guest experience, and workforce consistency—remain paramount. Black Box Intelligence will continue tracking these dynamics closely, helping brands stay proactive in a rapidly shifting landscape.

Stay tuned for next quarter’s snapshot, and don’t forget to subscribe to the Lessons from the Field podcast for in-depth leader interviews from across the industry.