While many a song suggests the pitfalls of looking in the rearview mirror, what’s gone before offers a particular perspective, a lesson in how our actions affect our trajectory. In the restaurant industry, we analyze historical data and trends to determine successful strategies. In business, we study past performance to extract insights that enhance operations.
Now, as one year begins and another ends, we stand at a crossroads, the perfect time to look back before racing ahead. Of course, if we look back too long, we’ll invariably crash. The key is a quick glance and enhanced awareness. Then, as Henry David Thoreau said, “Go confidently in the direction of your dreams. Live the life you have imagined.”
So, let’s see what we’ve learned and what 2024 tells us about where we’re going.
2024 Headlines: Bankruptcies
It was hard to pull up a browser and not see headlines about the latest restaurant chain in trouble. From Red Robins to TGI Fridays, over 30 brands filed for bankruptcy protection in 2024, according to Restaurant Business. This figure represents the most restaurant bankruptcies since the disruptive year known as 2020.
Why?
Some financial experts point to an influx of restaurant openings after the pandemic surged through and left us cleaning up the ashes. According to Yelp, almost 53,800 new restaurants opened their doors in 2023. Economics 101 suggests that the supply exceeded the demand and, like dominoes, began to fall under the weight of the new arrivals.
Others point to inflation, changing consumer habits, and rising costs. So much to choose from.
In 2025, you can expect to see some savvy investors taking a close look and buying smaller chains out of bankruptcy.
The Changing Restaurant Landscape: Fast Casuals Vs. Full Service
You were among the popular crowd if you were a fast-casual restaurant in 2024. While quick-service restaurants faced value wars and closures, fast-casual restaurants tossed their hair back and smiled, saying, “It’s great to be me.”
One of the top contenders was Wingstop, the world’s largest fast-casual chicken wing chain. This hot, hot, hot brand expects same-store sales to be up by 20% for the year. What’s the key to success? They marked all the checkboxes on the “How to Run a Restaurant Right” tabulation sheet.
One of the winning decisions was leaning into technology. They standardized their POS systems and menu before rolling out an integrated online ordering system. Their digital sales increased to 69% of their system-wide sales.
What else do they have going for them? A dynamically aggressive franchise expansion plan and digital marketing geniuses that increased brand awareness.
And what about full service? Who?
Restaurant Business shared an interesting statistic. For only the fourth time since 2014, the number of full-service restaurants declined compared to the previous year. If they weren’t filing for bankruptcy, they were determining the units that weren’t performing well, shutting down stores as fast as Wingstop was opening them.
Once again, over-saturation was one of the key factors in liquidation. The other was the changing consumer who had grown tired of increasing menu prices and inflation. And their love for takeout, though diminishing, still remains. A US Foods 2024 survey revealed that 55% of respondents prefer dining at restaurants over takeout in 2024. In 2023, that number was 43%.
And what about 2025?
For innovative brands turning to technology, digital marketing, and unique food and beverages to enhance the customer experience, 2025 may be a year to remember. In 2024, Chili’s gained significant traction when their $10.99 3 for Me special went viral on TikTok. As a result, the brand generated the strongest sales they’d seen in 20 years.
For many restaurants, 2024 was a year to forget. For some, it was one of the best years in their existence. Those who thrived jumped on the innovative bandwagon and focused on digital marketing strategies. They developed an authentic voice and shouted it to the rafters and beyond.
With increasing sales a top priority, expanding these strategies and enhancing the customer experience are on many restaurants’ 2025 to-do lists.
At EMERGING, we support restaurants’ success through our unrivaled network of operating companies. From access to influential industry leaders to technology-driven transformation, we’re committed to helping brands expand and thrive in the years ahead. To learn more or to schedule a consultation, contact EMERGING.
