Limited-Service Restaurants NAICS 722513

Jul 14, 2025 - Spending Slowdown

• Consumer spending at small restaurants slowed in June versus May, according to new data from fintech company Fiserv, Nation’s Restaurant News reports. Fiserv’s Small Business Index shows that while small restaurants/independents experienced modest 0.4% year-over-year sales growth in June, month-over-month transactions declined by 2.6% and foot traffic dropped 2.5%. June’s negative monthly comparison followed a 5.6% month-over-month drop from April to May. Just 13 states experienced a positive performance in food service and drinking places in June, versus 34 in May. The spending slowdown signals caution for the restaurant industry where traffic, sales, and hiring trends have been mixed so far this year,” according to the National Restaurant Association’s Economic Outlook for mid-2025. The association’s cautious outlook is supported by recent surveys from PopMenu and KPMG indicating that consumers plan to pull back on their restaurant spending amid ongoing economic concerns.
• The first quarter of 2025 marked one of the worst quarters that restaurant chains experienced since the onset of the COVID-19 pandemic, Restaurant Dive reported in May, citing widespread declines in same-store-sales at major restaurant chains. Major publicly-traded quick service restaurants experiencing declines in Q1 same-store-sales included McDonald's, KFC, Burger King, Popeyes, and Wendy’s. The lone exception was Taco Bell which saw a 9% jump in comparable sales in Q1, defying the downward trend thanks to an aggressive value strategy and new premium dishes, according to a Restaurant Dive analysis of first quarter earnings reports. An examination of pizza delivery chains turned up similar results, with Q1 same-store-sales down at Domino’s, Papa John’s, and Pizza Hut. Customer visits and sales are declining as consumers rein in spending. Starbucks saw comparable sales fall in Q1 for the fifth consecutive quarter.

• According to the National Restaurant Association’s 2025 Off-Premises Restaurant Trends report nearly 75% of all restaurant traffic now occurs off-premises through takeout, delivery, or drive-thru. “Off-premises dining has become a key revenue driver and an essential way to engage consumers,” said the NRA’s chief economist Dr. Chad Moutray, adding “It now accounts for a larger share of sales for 58% of limited-service operators compared with 2019.” Nearly two-thirds (65%) of limited-service operators now offer delivery, with many expecting curbside and dedicated takeout areas to become even more common this year. Two-thirds of Gen Z and millennials say takeout is essential to their lifestyle, and nearly 6 in 10 use takeout or drive-thru at least weekly. Also, more than 60% say they’re ordering off-premises more often than a year ago, per the NRA report. Three-quarters of delivery customers say they value tech-enabled ordering and payments to speed transactions.
• Restaurants are projected to add 490,000 jobs this summer, according to the National Restaurant Association’s 27th annual Eating and Drinking Place Summer Employment Forecast published in June. Summer hiring is projected to be strongest in Northeastern states, including Maine, Rhode Island, and Delaware, as well as in Alaska, which are projected to see the largest proportional increases in restaurant employment. Per the NRA, the increase in hiring is fueled by a stronger labor pool, especially teens and young adults, returning to the workforce in numbers not seen in years. Average wages at limited-service restaurants rose 3.4% in April compared to a year ago to$16.64 per hour, according to the US Bureau of Labor Statistics.