Technomic 2025 Foodservice Industry Forecast
Technology, Serving Solutions, Culinary
2025.05.01
In 2025, the foodservice industry is projected to grow by 1.0% in real terms. This growth is fueled by moderate overall GDP expansion and a stable labor market. Key growth drivers include restaurants, retail outlets, and on-site services.
One of the more notable trends expected is a shift in consumer traffic from full-service restaurants to limited-service formats, especially among lower-income households. Despite ongoing inflation—particularly in food-away-from-home categories—consumer spending has remained resilient. This is partly because wages have outpaced overall price increases.
A new presidential administration is leading to major changes to policies that will impact food service including:
- Increased tariffs
- Shifts in food funding and regulations
2025 Industry Assumptions
Assumption #1: GDP and Consumer Spending Stay Positive
Although a recession remains a risk, current indicators suggest positive GDP growth in 2025. Consumer spending, which makes up the majority of GDP, is expected to remain strong, and that will benefit the food service industry directly.
Assumption #2: Unemployment Remains Low
This is a double-edged sword. While more employed consumers = more spending, foodservice operators are grappling with higher labor costs and persistent staffing shortages. Many are still unable to operate at full hours or service levels due to hiring challenges.
Assumption #3: Inflation Eases But Remains High for Dining Out
In 2022, operators began adjusting menu prices to offset rising costs. That trend continued into 2023 and 2024. While food-at-home inflation has slowed, food-away-from-home prices remain elevated. This gap may lead consumers to swap meals out for meals in. The impact of newly enacted tariffs from President Trump remains to be seen, but it is expected that prices for consumers on many goods will increase in the near-term. Operators must innovate—creating experiential value to keep customers coming through the door despite elevated pricing.
Assumption #4: Uncertainty Reigns
With a new administration in the White House that is not afraid to make bold moves, we are living in unpredictable times. Already major policies changes around international trade, immigration and food policy are shaping the food service industry and the entire country. Additionally, geopolitical hurdles are especially prominent, as we have an increasingly global economy.
Key Segment Predictions
C-Stores - Projected 1.5% Real Growth
Convenience stores continue to rebound, with newer locations focusing on high-margin prepared foods. These products are now a stronger profit driver than gasoline or cigarettes. Though unit counts declined during COVID, modernized stores are on the rise.
Fast Casual - Projected 1.6% Real Growth
The fastest-growing restaurant segment of 2025, fast casual brands have:
- Pivoted toward suburban markets and dinner occasions
- Invested in digital ordering and loyalty platforms
- Built employee-friendly environments that outcompete QSRs in a tight labor market
QSR – Projected 1.0% Real Growth
Quick service remains solid, driven by its value proposition. Despite headlines calling fast food a “luxury,” QSRs remain the most affordable restaurant option. Chain-led investments in technology (front and back-of-house) and loyalty apps continue to pay off.
Looking Ahead
The year ahead will be marked by modest growth, sharp consumer behavior shifts, and evolving external pressures. To stay ahead, operators will need to:
- Embrace flexibility
- Invest in efficiency
- Double down on digital
- Differentiate with experience and value
Source: Technomic 2025 Industry Forecast