Restaurant365's Midyear State of the Restaurant Industry Reveals Increased Focus on Food & Labor Cost Controls

R365's biannual study shows fewer restaurant operators raising prices as they target employee training to support the bottom and top lines.

IRVINE, Calif., July 15, 2025 /PRNewswire/ -- Restaurant365, the leading all-in-one restaurant management platform, today released findings from its biannual industry survey. Restaurant leaders representing more than 5,000 locations shared 2025's top challenges and opportunities alongside their priorities for the rest of the year, including increased marketing and sales to drive revenue, training to improve guest experience and customer loyalty, and balancing cost controls with menu price increases.

The 2025 Numbers, So Far

Participants reported continued food and labor cost increases, with 89% experiencing rising staff expenses, well exceeding the 79% of last year's survey who predicted labor cost increases. 82% of those experiencing labor increases saw a 1% to 5% increase, while 15% experienced a 6% to 14% jump. Food cost increases also surpassed expectations, with 91% of respondents reporting a rise, up from the 82% who had expected increases at the start of the year. More than half of those coping with food cost inflation this year are seeing a 1% to 5% increase.

In response to rising food costs, 56% of respondents said they planned to increase menu prices, down from 61% earlier in the year, and 18% said they doubled down on inventory and waste tracking, up two percentage points. The vast majority, 65%, of those businesses experiencing rising labor and recruiting cost challenges said their primary response has been operating below full capacity, while 19% said they limited operating hours to manage the shortage and increased cost.

Looking Ahead 

Restaurant leaders anticipate continued challenges this year, particularly with the looming threat of tariffs hanging over the global economy. 78% of respondents said they expected to be impacted by tariffs, with 64% expecting a 1% to 10% increase in food cost prices due to global trade barriers.

At the same time, operators remain focused on the basics, with food costs, labor costs, and sales volume as the top three concerns for restaurants for the remainder of the year. Notably, 52% of respondents cite sales as their primary concern.

"The restaurant industry is clearly facing many challenges this year, but has also reached record-setting levels of sales and employment through their innovation," said Restaurant365 CEO and Co-founder Tony Smith. "We continue to invest in our platform to guide restaurants through this time so they can improve their margins alongside guests' experiences."

With increased sales as the top priority, more than 40% of operators plan to increase their budgets for promotions and marketing, particularly for off-premise dining, which remains one of the most significant shifts in consumer preferences post-pandemic. An additional 35% of respondents reported seeing more takeout and delivery orders than in previous years, which correlates with 33% of participants reporting a decrease in dine-in visits.

Operators are also preparing to boost employee training to drive both retention and the overall guest experience, with 30% of survey participants reporting they already increased pay. Another 30% said they spent more on enhanced training so far this year. For the remainder of 2025, improved training appears to be the focus, with 40% of participants pegging it as their top priority, followed by 27% working to offer employees better work-life balance, and 19% setting aside resources to increase pay.

Finally, improvements in staff training, which directly leads to improved guest experiences, will be critical this year. More than half, 58%, of respondents said they don't plan to open any additional locations this year, meaning that all additional revenue must come from existing locations. Of those looking to expand, 19% of participants said they're planning one additional location, and 20% said they're working on opening two to five more locations before the end of the year ends.

About Restaurant365^®
Restaurant365 is the leading back-of-house accounting, inventory, workforce management, and payroll solution developed specifically for the restaurant industry. R365's all-in-one restaurant management platform simplifies day-to-day management for leaders at all levels, empowering them to control food costs, optimize labor, and improve guest experiences. Restaurant365's cloud-based architecture and robust integrations allow it to connect to hundreds of POS providers, vendors, and banks, providing accurate, timely reporting that offers a complete view of the business and where managers can take meaningful action. Restaurant365 is headquartered in Irvine, California, and has an office in Austin, Texas. The company is backed by Bessemer Venture Partners, ICONIQ, KKR, L Catterton, and Serent Capital. Additional information is available at restaurant365.com.

Media Contact:
[email protected] 

SOURCE Restaurant365