NEXT YEAR’S HOTTEST POTENTIAL INDUSTRY DIRECTIONS
Every year we project what you can expect from the renewal of a new year. This year promises to deliver several important trend lines that will fundamentally change how the restaurant industry progresses for the foreseeable future.
From the advent of artificial intelligence (AI) to the explosive growth of the sports-themed segment, the near future will reveal changes in the way operators function and direct their business model.
Let’s dig and see where it all leads in 2025!
The Restaurant Industry Will Consolidate
Since the pandemic emerged in 2020, we have seen a massive shift in the landscape of chain operations. This has been fueled by the obvious consequences of the pandemic shuttering thousands of locations coupled with the significant number of stumbles experienced by over a dozen major chain bankruptcies.
From a strategic perspective, the landscape change will only exacerbate location grabs being executed by chain operators hoping to establish growth through failure of their competitors. Since the independent & small group vertical has already left available many prime locations, these failures by chains mean another opportunity to grow for those that survive.
A.I. Pervades Among Restaurants
You can’t open your browser these days without some reference to the explosion of artificial intelligence. Our industry is just now scratching the surface of the methods available to leverage A.I. to improve business operations. From smart inventory systems to facilities management tools, these new technological applications for artificial intelligence will abound during the upcoming year.
To best incorporate AI into your business, you must first understand that it is NOT a replacement for human intelligence; rather it’s a method for supplementing the recurring tasks that take away from your overall focus. Whether you employ AI to answer your phones or order your inventory, the tool is intended to automate tasks that are repetitive and predictable.
When considering where to apply AI, you should analyze the time the task requires and how the software will impact deliver a return on investment. If you can save more time than the cost of subscribing to the software, then give it a go.
New POTUS Promises Changes
Every new presidential administration comes with the promise of their campaigns. In the case of the new Trump administration, that means several potential changes to tax law that could dramatically change the tax regimes for restaurants. During his campaign President-elect Trump promised two significant potential policies that would directly change taxation for your employees.
His first proposal was to eliminate taxes on all gratuities. This would mean a tremendous wage increase for your already tax-advantaged service staff.
His second is a policy change that would eliminate taxes on all overtime, and it will be you that experiences the savings because the effective rate for overtime will be increased by the decreased tax liability. Stand by to see if any of these initiatives become a reality.
He’s also promised to tariff America’s biggest trade partners and deport millions of immigrants every year, both of which could trigger a recession. We detailed that a little more in our 2024 recap. So whether all these changes ends up being a net positive or not for the industry will TBD.
The Sports Bar Sector Will Dominate
The role of sports as entertainment cannot be understated. Every restaurant with a TV should consider itself a sports bar whenever a big event is airing. However, the more traditional sports bar motif has been on the rise for the last decade and it’s showing no signs of slowing momentum. In fact, the segment promises to continue a strong growth trajectory from now until 2030 when sales are projected to grow from today’s $22.6B to $34.3B.
For our segment, this growth is excellent news because it reflects an unrelenting demand for places to consume great sports content. It should tell you that investing in the best viewing experience possible is a crucial strategy that every sports-themed operator must embrace to tap into that potential growth.
Conclusion
While trends can shift at a moment’s notice, it pays to project what the future will bring so you can appropriately plan. The elements of our prognostications are all worthy of your attention and promise to contribute to your sustainable growth in the upcoming year.
Check back next December and let’s see how we did with our projections for next year’s trends.
