Restaurants NAICS 722511, 722513, 722514

Oct 14, 2025 - Younger Consumers Cutting Spending

• Younger consumers are cutting back on spending, with restaurants among the first to feel the impact, two new studies show. According to the semi-annual Taking Stock with Teens survey, teens’ annual spending has declined by 6% year-over-year and is 1% below the average spending levels from the past 10 years. Also, research from investment bank TD Cowen finds that consumers ages 18-34 are under more pressure than the average consumer. The pullback among younger consumers, who make up about 40% of all restaurant guests, has major implications for the industry, especially the fast-casual segment, which relies heavily on younger guests. Restaurants are attempting to “future proof” their positioning by rebranding or launching youth-focused loyalty, digital, or campus initiatives to maintain engagement with younger audiences. Operators may need to rethink marketing, menu pricing/value tiers, loyalty incentives, and targeting to shore up revenue during lean times.
• Technomic has lowered its 2025 restaurant sales forecast, Nation’s Restaurant News reported in September. The market research firm predicts the annual sales volume across all top 1,500 chain restaurants will reach $478 billion this year, representing a 2.8% increase on a nominal basis. By comparison, industry sales grew by 3.1% in 2024, the industry’s lowest annual increase over the past decade aside from 2020’s pandemic-influenced 8% decline. Performance is expected to vary by category, with a sluggish year predicted for the burger, sandwich, and pizza chains, while sales growth at chicken, Mexican, and coffee concepts are expected to remain relatively strong. The burger sector projected to grow by just 0.4%, the sandwich sector by just 0.3%, and the pizza sector is projected to fall 0.2%. These three categories remain stagnant after growing combined sales by less than 1% in 2024.

• McDonald’s has split with the National Restaurant Association over its support for the no-tax-on-tips policy, Nation’s Restaurant News reported in September. The CEO of the fast food giant Chris Kempczinski said in a recent interview that “The issue with no tax on tips is it only benefits those restaurants that have tips.” Instead, he suggested a blanket minimum wage for both tipped and non-tipped employees. Central to the dispute is the tipped minimum wage (just $2.13 an hour under federal law), which allows full-service restaurants like Chili’s and IHOP to rely on gratuities to fill the gap to $7.25. McDonald’s has seen its market share shrink in the face of stiff competition from full-service casual chains that rely on tipped wait staff, creating an uneven playing field. That advantage is helping those chains push cheap burger deals that are cutting into McDonald’s sales.
• New tariffs on food and beverages imposed by the Trump administration threaten to drive menu prices even higher, according to a recent statement from the National Restaurant Association (NRA). The trade association called out coffee and hamburgers as examples of menu items under pressure from tariffs, notably a 50% tax on imports from Brazil, a major provider of coffee and beef. “Operating a restaurant is becoming increasingly difficult due to economic and regulatory pressure and a nearly 5% increase in wholesale food costs since last year,” NRA CEO Michelle Korsmo said in a statement, adding “These new tariffs on food and beverage items will exacerbate the situation,” leaving many restaurants with no choice but to raise prices. The NRA notes that tariffs disrupt supply chains, drive up costs for restaurant operators, and ultimately lead to higher menu prices for consumers, already put off by the rising cost of dining out.