Blackbox Intelligence recently came out with their Restaurant Industry in Review and January 2025 trends. We’re happy to report that these statistics show a positive trend, an industry looking up despite continuing challenges. Blackbox went so far as to say, “January 2025 provides as much cause for optimism for the restaurant industry as we’ve seen in the past couple of years.”
That sounds a bit like a cause for celebration.
Here, we’ll explore what these latest numbers mean, where restaurants excel, and what to look forward to as the year progresses.
Restaurant Sales Growth
January saw the most significant sales growth in the last 18 months, with same-store sales moving upwards 2.5%. Interestingly, this growth came despite the cold, with some regions experiencing bone-chilling temperatures.
January saw an arctic front move south, reaching as far as Mexico. Some states, such as South Carolina, saw the coldest January in 25 years. Overall, the U.S. experienced the coldest start to a new year since 2011.
Were guests coming in for a warm bowl of soup and homemade bread? Maybe. Hopefully, the trend continues.
On the downside, same-store traffic growth declined by -1.3%. Despite a slight decrease in customer visitation, sales are still projected to experience slight positive growth or remain stable, suggesting cautious optimism for restaurants’ economic environment.
Out-Performing Segments & Regions
While fast-casual is usually one of the top-performing restaurant segments, January proved otherwise. It was the only segment with small, negative same-store sales growth. The other under-performing segments were family dining and quick service.
The best performing segments were, wait for it…fine dining as well as casual and upscale casual.
And what regions found the best traffic growth? New England and the Midwest came in on top. The worst traffic growth coincided with areas that saw the harshest weather and the devastating effects of wildfires. These regions include the Mountain Plains, the Southeast, and California.
The cuisine that hit it out of the park was bar & grill, while the sandwich scene struggled.
When crystal balls emerged from their shelves at the end of 2024, industry experts suggested a shift toward fine fast casual, a developing restaurant segment that combines the quality of fine dining with the convenience and ease of fast-casual. It looks like they may have been right.
These restaurants are known for their excellent food and chef-driven menus, served in an environment that doesn’t require formal attire.
Additional Reasons for Optimistic Outlooks
According to the National Restaurant Association (NRA), the labor market is still showing signs of expansion, with the last three months seeing an additional 237,000 jobs added. This figure represents the strongest three-month moving average in about two years. States seeing the greatest job growth since the pandemic include Idaho, Utah, Texas, and Florida.
The economy also remains at or near full employment, with the January national unemployment rate at 4%. States with the lowest unemployment rates include South Dakota, Vermont, and North Dakota. On the opposite end of the spectrum, states with the highest unemployment are Nevada, California, and the District of Columbia.
Another plus is that inflation is expected to continue trending downward, approaching the targeted 2% by the end of this year.
And what about the all-important disposable income figure? While still positive, with an inflation-adjusted increase of 1.7% in 2025, it is down from the 2.9% increase in 2024.
Key Insights from the NRA’s 2025 State of the Restaurant Industry Report
Restaurant Dive recently reported on the latest industry report by the NRA. Food and labor costs represent the challenges that persist. This year, 82% of restaurants surveyed expect rising food costs. In response, they are closely monitoring inventory and their menus, adjusting as needed. They are also working with suppliers.
Almost 80% also expect labor costs to continue to increase. Responses to this expectation include cross-training and optimizing scheduling through data analysis.
Those looking to add additional revenue streams focus primarily on catering services, special events, and promotions. All restaurant segments, from fine dining to casual, report that increasing their on-premise traffic is the priority. The Key?
Restaurant customers continue to report that experience is what drives their decisions. According to NRA, 64% of full-service customers said the dining experience was more important than the price.
So, what does 2025 look like for the restaurant industry? As always, those with persistent determination find their way around the challenges and toward a bright new year filled with possibilities.
