Keeping all of these in mind, as well as other factors that shape the future of foodservice including shifting consumer behavior, changing demographic dynamics and more, here are… 

Datassential’s Broader Foodservice Predictions for 2025:

Winners vs. Losers: Gap will be Wider Than Ever

Consumers are pickier than ever. Although the industry overall will see positive real growth in 2024, that growth will be uneven between brands.

Operators need to have a sense of their own identity and understand how to connect with today’s consumers. The days of being “all things to all people” are behind us as operators look to carve out their niche and focus on what they do best. This will promote a sense of authenticity while also likely improving back-of-house (BOH) challenges, since a streamlined menu can be a part of that improved identity.

In-Person Experiences Continue to Propel Industry

Although we are past the phase of massive pent-up demand from COVID, the pandemic has had a lingering effect on how consumers spend their time and money. We can look to trends like quiet quitting (where employees just stop working as hard) to see how consumers are focused on enjoying life and making the most of each moment. This is excellent news for an industry that is focused on pleasure and joyful experiences. Operators who tap into how to delight consumers will do best in the near-term.

High Costs May Be Limiting Growth

Historically high interest rates have meant that capital is expensive in the last year. It is more costly to build new units and to borrow money for improvements. This will inherently limit growth for the industry as a key source of possible growth is new locations. The industry is pivoting and finding ways to expand and create more revenue through other methods such as mergers and  acquisitions and adding new brands to existing locations (think of the various multi-brand storefronts that have been popping up). This is likely to continue in 2024 as interest rates remain elevated, though they did get cut in September and more reductions are expected yet this year.) 

Consumers are Resilient and Want to Treat Themselves

Consumers view foodservice as something nice that they want and deserve.

Life has gotten financially harder for some households in the last year and although that means they quite literally may have less money to spend, it also means that they are more likely to want to treat themselves. We see as evidence of this the success of restaurant brands that are focused on snacking and smaller/indulgent occasions (such as coffee and cookies).

What’s more, consumers tend to feel like their own financial situation is better than that of the country overall and that feeling of doing relatively better means that they might feel more justified in spending a little extra money.

Restaurant Unit Changes Align With Segment Success

Fast casual is the leader in projected sales growth and that is fueled in part by the fact that the segment is also the relative leader in having added units in the last year. Similarly, QSR is adding units year-over-year and more units means more opportunities to drive sales. Midscale has seen consistent unit declines year-over-year. Fine dining has been flat, while casual dining has fluctuated in the last year between adding units and removing them (relative to a year earlier). It is unclear which is the driving factor: unit changes or sales changes (the proverbial chicken or the egg!), but the relative change in units is in-line with sales changes by segment

Higher-Income Households Drive an Outsized Share Of Industry Sales

There are indicators that lower-income consumers are pulling back on their restaurant spending and the industry (especially QSR and casual dining) are working to draw them back in with value deals. And while we need these consumers for strong growth, the reality is they do not comprise the bulk of the dollars spent at restaurants. According to the Bureau of Labor Statistics, households with income over $100,000 make up almost 60% of restaurant spending and those under $50,000 account for just 20% of spending. 

The industry should think of ways (hello value meals!) to keep lower-income consumers coming in the door, but also not forget the very impactful higher-income consumers as well who may be more motivated by premium and innovative offerings. The industry needs to find ways to appeal to both high- and low-income consumers to maximize growth.

‘Segment Blurring’ is Shifting Who Succeeds and Who Fails

We are living in the age of value as we manage consumer expectations in high inflationary times and what that has meant for menu prices across restaurant segments has complicated how consumers think about occasions and dining out. 

Some meal deals at casual dining chains are now lower priced than the equivalent at fast casual chains. Similarly, QSRs are competing heavily on price and some of their offerings now rival c-stores (which had historically been priced lower). 

Service remains a differentiator, but as off premise occasions keep their stronghold, the service component matters less than before. 

This segment blurring is likely to mean consumers are more open to a wider range of foodservice outlets for a wider range of their dining needs.

Demographic Shifts will Shift the Foodservice Landscape

Overall population numbers for the U.S. will continue to grow for the next couple of decades, though at a decreasing rate, and lifestyle shifts for Boomers and Millennials, as well as with immigration, will impact the foodservice industry. 

Millennials are increasingly likely to have kids in their household and that will impact their relationship with foodservice. These households with kids have shown some of the highest resilience to rising prices and other negative macroeconomic pressures. 

Boomers in retirement have shown a renewed interest in food and are often choosing to age in more urban and food-forward locations than prior generations. 

In addition, U.S. population growth is increasingly driven by immigration rather than birth rates. This means that our population is increasingly racially and ethnically diverse, and foodservice offerings may need to shift to reflect these changes.

Ann Golladay is a Senior Director at Datassential. 

This article features a snippet of the vast information contained in the full 2025 Industry Forecast report, which is available only to subscribers and contains full segment analyses, more key predictions on the years ahead, and a comprehensive economic forecast for the years to come. 

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This work is based on the operator landscape which is a model created by Datassential in partnership and with support from IFMA.