It’s December. Congrats for surviving another year. As always, 2024 was far from a boring year for operators who are still trying to play catch up from the COVID pandemic four years ago.

Let’s quickly walk through the top restaurant stories of 2024.

Big Restaurants Go Bankrupt

The restaurant industry is always tough but 2024 was not kind for some big and local restaurant chains.

TGI Fridays, Bucca di Beppo, One Table Restaurant Brands, Red Lobster, Rubio’s and Tijuana Flats, among many others, all filed for Chapter 11 this year.

The reasons were pretty wide ranging, but the most common rising labor costs and lingering effects from COVID-19. A quick run-down:

TGI Fridays cited “financial challenges resulted from COVID-19 and our capital structure.”
Bucca di Beppo also cited the pandemic, plus inflation pressure on consumers.
One Table Restaurant Brands pinned their downfall on third-party delivery fees, rising debt costs, and only a partial COVID recovery.
Red Lobster bankruptcy came as a mix of pandemic-related issues, rising material and labor costs, it’s sale-lease back issue, and (perhaps) Thai Union’s involvement in the failure of its Ultimate Endless Shrimp promotion.
Rubio’s filed for bankruptcy for the second time in four years, this time citing increased food costs, utility costs, and labor costs.

Restaurants obviously did their best to stay afloat. Restaurants raised prices 30% in the past five years, according to Bureau of Labor Statistics Data, while overall prices went up 22% and grocery prices went up 27%.

Inflation Steadily Decreases

A bright spot is that inflation steadied and lowered over the course of 2024.

Rates hit their worst in June 2022, with inflation spiking at 9.1%. It dropped rapidly over the next year and then steadily decreased to 2.6% in October 2024. Core inflation saw a more gradual decreased during that time. That’s good for operations and overhead costs for restaurants in desperate need of a break.

On the flip side, dining out still got more expensive for consumers. The cost eating away from home was up 3.8% YoY in October 2024, higher than the 1.1% increase in inflation for food at home, according to data from the US Department of Labor’s Bureau of Labor Statistics.

In July, more than half (55%) of US adults said they were considering cutting back on dining out or home delivery/takeout, according to a PwC survey.

Some restaurants, like McDonald’s, have leaned in hard on value menus to lure guests back into their stores. And restaurants are still seeing “healthy sales volume” as inflation cools, according to the National Restaurant Association.

AI Makes its Grand (Re)Opening

For better or worse, Artificial Intelligence (AI) came screaming into every aspect of life in 2024, including the restaurant industry.

In reality, AI has been around longer. Machine learning, for example, is sub-set of AI which is more of an umbrella term. AI just became the hot buzzword of 2024 and every company slapped the AI label on their products.

Restaurants are notorious for lagging behind in technology. Fortunately for operators, tech and vendors that restaurants are already using added AI-powered features, including POS and inventory management systems to mitigate food waste. In fact, 47% of restaurants are already using some form of AI tech and 35% who currently don’t do plan on it soon, according to the National Restaurant Association Technology Landscape report.

AI chat bots are also a common and easy entry into the AI world, though AI “hallucinations” is a common problem restaurant operators should be aware of before investing in the tech.

Fast food chains were one of the industry leaders in adopting and experimenting with AI. McDonald’s, for example, experimented with using AI to take drive through orders, though it paused that program with IBM after two years.

Wendy’s has also been experimenting with AI drive-thru orders, though only claiming an 86% accuracy rate. The fast-food chain expects to use also AI in their ordering kiosks and apps.

Domino’s has been using an AI assistant, named Dom, for online orders, while Starbucks' Deep Brew program is aimed at giving guests custom marketing based on their previous orders.

Of course, AI has strong opponents, specifically generative AI which steals photographs, art, and images from unpaid artists to generate “new” images which could lead to litigation. AI used in variable or dynamic pricing has also gotten consumers up in arms. Lastly, generative AI has made faking reviews even easier for restaurants.

Trump Wins Presidency

While not specifically a restaurant story, there’s no doubt that Trump winning the 2024 election will have a big ripple effect, especially as the next four years roll by.

Tariffs & Restaurants

Trump has already threatened tariffs – 25% on Canada and Mexico products, two of the US’s biggest trade partners. And while these blanket tariffs will hit every aspect of American life, the food and restaurant industry will definitely take a big blow to the face.

Mexico made up 69% of US vegetable imports and 51% of fresh fruit and nut imports in 2022, according to the U.S. Department of Agriculture. That translates into US importing about $20 billion of products from the Mexican agriculture, forestry and livestock sectors. The cost of those tariffs will trickle down, meaning higher costs for restaurants who would have to decide on eating less profit or kicking that cost down to their guests.

It could also lead to less fruit and veggies available, in general.

Countries that Trump slaps tariffs on may also retaliate with their own tariffs on US items, starting a trade war. This could lead to 400,000 US citizens losing their jobs. That’s a huge number and dining out will surely take a huge hit as Americans tighten their belts. Inflation will increase. Higher costs means less money in American citizens’ coffers, and that typically translates into dining out less.

Some restaurants are already prepping for the worse, such as Meximodo, a popular Mexican restaurant and tequila bar in New Jersey, which is importing extra bottles of Mexican beer and tequila… just in case. They’re also owned by Le Malt Hospitality Group, which has the means to stock up. Smaller, independent restaurants that work on super tight budgets don’t necessarily have the same means to stockpile.

Plus, there’s only so much fruit and vegetable one can stock up on. But any sort of stockpiling can lead to product shortages and price spikes.

America’s biggest import from Canada is oil, meaning higher energy costs for not just US citizens but businesses, like bars and restaurants.

Immigration & Restaurants

Trump’s stance on immigration and nominating Project 2025 members to his cabinet also could make a serious dent in our industry.

In Trump’s first term, he deported 1.5 million people (over the course of four years). Now he and his advisors are promising to deport 1 million per year in his second term. While it’s unclear if he can pull this off, the how’s ar.

Moral and ethical issues of deportation aside, a large number of restaurant workers are immigrants, as well as the backbone of America’s food system. Immigrants make up 22% of all US workers in the food services industry, including restaurants and bars. In states with a high density of independent restaurants -- such as California, Texas, and New York -- this number exceeds 30%.

That’s a lot. Imagine 25-30% of your staff disappearing overnight. How would your restaurant cope?

At a time where getting enough qualified staff is already difficult (3.6% below pre-pandemic levels), losing up to a third of your team would be devastating to smooth operations.

Sadly, legal path to immigration in the US is in a bad state. The US Department of Justice’s (DOJ’s) Executive Office for Immigration Review (EOIR) is sorely underfunded, meaning that immigrations hearings and cases are taking a lot longer. Immigration cases backlog jumped from 600,000 cases in 2017 to 2 million in 2023. There’s just not enough federal workers to make things run smoothly. And budget cuts keep happening.

Deportation has huge economical effects, as well. One analysis shows Trump’s deportation plan could reduce 2025 GDP growth by between 0.1 (“high” scenario) and 0.4 percentage points (“low” scenario), or by $30 to $110 billion. That’s enough to potentially trigger another recession; plus, undocumented workers pay just under $100 billion in taxes every year.

Again, whether Trump will actually go through either his plans or is just mafia strongarming or bluffing, only time will tell. But it’s safer to assume he means to go through with it and figure out how to plan to protect your employees and cope should the worst happen.