Consumer uncertainty around the economy and tariffs has led restaurant operators to seek new traffic drivers
Traffic challenges continued in the restaurant industry in the first quarter, driven by consumer uncertainty, according to the Q1 2025 Technomic Consumer and Operator Outlook.
Lori Rakoczy, associate principal at Technomic, said in a Wednesday webinar that the firm’s recent survey of 3,000 consumers and 500 restaurant operators found lingering psychological effects from inflation — worsened by economic uncertainty around tariffs.
Restaurant operators are looking at various limited-time offers to drive traffic, Rakoczy said.
“It's critical for operators to strike that balance between price and these other measures that are important — like quality, like taste and also service — to improve that value proposition for their customers,” she said.
The number of restaurant operators looking at LTOs over the next six months has more than doubled, she said, up from 25%
“When we ask them what kinds of LTOs,” she said, “typically it's seasonal items around the holidays.”
One in five said they would offer value-focused deals, Rakoczy added.
She said restaurant operators will likely seek support from suppliers on menu optimization and making sure they have the right mix on menus.
“They'll also be looking for support on pricing analysis,” she said, as well as assistance on innovation and possible product swaps, especially if some ingredient or item is no longer available or too costly because of increased prices or tariffs.
“The winning brands are really going to be around preserving quality,” Rakoczy said, and innovation will be to promote value.
Consumer confidence numbers have dropped to the lowest point in about 12 years, she noted. “When we see confidence drop, that traditionally does lead to consumers pulling back on restaurant spending,” Rakoczy said.
Operators will need to strike a balance between price and other measures like quality, taste of menu items, and service, she said.
Technomic is a sibling company of Nation’s Restaurant News. Both are owned by Informa Connect.
Email Ron Ruggless at [email protected]
Follow him on X/Twitter: @RonRuggless
You May Also Like
