As with nearly every aspect of life, dining and food service have never quite been the same since the COVID-19 pandemic. Among many other sectors, the restaurant industry is facing new challenges and a changing world- but some are struggling to keep up. New customers, new tech, and new demands are coming from all directions, but how can restaurant leaders take back control?
Today we will be exploring these questions in Deloitte’s report entitled “Future of Restaurants and Food Service: Thriving Amid Disruption,” as well as look at one restaurant whose successes we can learn from. Deloitte surveyed 150 restaurant executives to gain insight into their biggest challenges, as well as what they’re doing to take action and prepare for the future. They’ve identified 6 macro factors shaping the future of the industry, and more importantly, 5 imperatives for businesses to consider.
New Factors
In Deloitte’s separate consumer report, “Buying into Better: The Future of the Consumer Industry,” they explore these 6 macro factors in greater detail. It begins by highlighting one of the simple facts of life: that change is inevitable and unavoidable. However, understanding these key factors will be imperative to keeping up with a rapidly evolving consumer.
1. Transformation of the customer, with growing diversity and shifting consumer demographics.
2. A changing culture, where customers have more choices and convenience than ever before.
3. The rise of X-tech, including fin-tech, bio-tech, and info-tech.
4. Disruption of the industry, where restaurants are racing to adopt new technologies and infrastructure.
5. The acceleration of climate change, causing companies to reconsider their environmental impact and corporate responsibility.
6. Global political and socioeconomic changes, impacting the supply chain through tariffs and geopolitical conflict.
A Changing Landscape
All of these forces are showing up in the restaurant industry, leading to an unprecedented and challenging landscape for restauranteurs. Based on research in collaboration with the James Beard Foundation, Deloitte explains that there has been a “radical transformation of the consumer,” as shown by new shifts in demographics. finding that single-person households now make up more than a quarter of households in the country. This shift from nuclear families to a greater number of single and highly diverse customers requires an entirely different approach from marketers.
Other notable statistics from Deloitte’s survey of restaurant executives includes the finding that “84% of respondents believe there is an increasing pressure to offer a better digital experience.” However, many restaurants are experiencing tech debt, where they are struggling to keep up with adopting new emerging technologies. To achieve this, 75% of restaurants surveyed use social media as a key tool for engagement – however Deloitte points out that AI is the true tool that businesses need to be harnessing.
Finally, “the relentless push for more convenience” is stretching some businesses to their limit. Many restaurants have created multiple channels for service; including online in-app, delivery, pickup, and drive-thru options. This required sophisticated digital platforms and tools, and 78% of respondents feel that managing delivery aggregators is a big challenge as well.
This “creeping operational complexity” combined with high input costs has 88% of respondents concerned. These input costs fueled by inflation are impacting both materials and labor, and rising environmental threats are too affecting traffic and costs.
In fact, waste and high energy usage are among the biggest challenges surveyed restaurant leaders are facing as they attempt to improve operations and supply chains. This evolution of the industry will require new solutions, but there are more tools than ever to help.
Five Strategies to Consider
This unique combination of challenges means that the ability to adapt and evolve is crucial for every business in 2025. There are multiple new strategies that restaurants are exploring, but Deloitte has identified the following 5 as imperative for success.
1. Exploring New Growth Opportunities
With a more diverse customer base, restaurants will need to consider experimenting with new formats, innovative concepts, new locations, and menu and culinary expansion. Deloitte’s survey found that 83% of respondents experienced difficulty finding new in-person locations, which further solidifies the need to offer a variety of service options to customers. Some restaurants are even trying drive-thrus or takeout-only restaurants to increase efficiency and take advantage of these new channels.
Innovation will drive success, and expanding menu options is another effective way to reach new markets and foster growth opportunities. Similarly, cashing in on emerging trends like “dirty sodas,” mocktails, and health-conscious options can help drive traffic and social media engagement.
Deloitte also emphasizes the opportunity for revenue growth management through leveraging AI tools, implementing strategies such as location or segment-specific pricing, and also web scraping to automate competitive pricing insights. Finally, digging into occasions relevant to customer segments where they are winning as well as identifying new segments open to expansion will provide growth options.
2. Prioritizing Connection with Customers
With the saturation of convenient options, customers are seeking meaningful connections and experiences to make in-person dining feel worth their time and money. Restaurants that can provide both, with seamless blending of digital convenience and real-world enjoyment, will be most successful. Deloitte found that creating leading digital experiences, such as personalized offers/suggestions and seamless payment, had the highest impact on performance. 50% of respondents also reported that building new channels, such as fast lane and digital lane only, is the most impactful.
One of the most effective ways to build connections with your customers is through elevating your loyalty problems. According to Deloitte’s recent Loyalty Survey, 77% of restaurant consumers are more likely to start spending with a brand once they enroll in the brand’s loyalty program. In addition, 41% of restaurant consumers surveyed engage with loyalty programs on a weekly basis.
Deloitte’s findings reinforce what we see every day: loyalty programs are one of the most effective ways to deepen customer relationships and drive repeat visits. At inteQ, we specialize in building custom loyalty programs for businesses to help transform customer engagement and create lasting connections with customers. For a case study on how we helped one business strengthen their customer loyalty, check out this recent blog.
Finally, immersive, in person experiences have proven to help fuel social media exposure and business growth. Interactive table service, popups, and collaborations can all create shareable moments. These are great ways to celebrate special occasions or holidays to create fun, themed events to delight customers.
3. Optimizing Efficiency
According to restaurants surveyed, improving operations, speed of service, order accuracy, and logistics are their top areas of investment. Predictive analytics is one way to help improve real-time forecasting and decision making at all levels of business. Survey respondents stated that operational improvements with the most impact included leveraging analytics or AI-based sensing to inform next-best-action direction, ultimately resulting in hotter, fresher food, lowered wait times, and reduced waste.
GenAI is being used in the restaurant industry already, helping with many areas including improving upselling success, personalizing promo offers, and even taking orders. Agentic AI agents can also help identify opportunities for improvement and have many more uses in this sector that have yet to be fully explored. Simple automation, however, is a tried-and-true tool that can complete repetitive tasks to alleviate burden from your workforce while improving speed and accuracy.
4. Empowering Your Employees
Providing the necessary education to your workforce when adopting new technology is critical to ensure you’re taking full advantage of its capabilities. This includes strong project management skills which were cited as one of the top contributing factors to the success or failure of adopting new technology. It’s important to ensure strategy alignment with your workforce, and leveraging technology can also help attract and retain employees.
The top 3 investments with the greatest impact are improved kitchen management systems, dynamic scheduling software, and updating staffing models based on new demands and channels of service. Leveraging these technologies, along with AI assistants, predictive analytics, and even creating digital twins canal keep things running smoothly and reduce stress and turnover for your workers.
5. Setting The Stage for Sustainability
Restaurants are now realizing that consumers are valuing sustainability more and more every day. Improving supply chain transparency and emissions reporting is one of the most crucial ways to gain customer trust, however only 3% of companies surveyed say they produce sustainability data that is as accurate as their financial data. In our last blog post, we actually explored how inteQ’s data integration platform, Genesis, can help companies get a clearer view of their environmental data and improve their traceability.
Transforming the way restaurants source their foods can also make a huge difference in their carbon footprint by shortening supply chains, sourcing from local farmers, and rotating menu options to use only foods that are in season. Deloitte found that 52% of consumers surveyed reported making a sustainability based purchased in the last 4 weeks, and 34% of those paid significantly more than an alternative. This means that offering sustainable menu options such as vegan or locally sourced meals, biodegradable materials, and reducing plastic packaging can all help appeal to new customers.
Success Story: Red Lobster
One company finding success with these strategies is Red Lobster, as proven by their recent overhaul following the addition of CEO Damola Adamolekun. Prior to him joining the company in September of 2024, the casual dining restaurant was struggling to retain customers and relevance- ultimately leading to bankruptcy just 4 months earlier in May 2024.
The 36-year-old CEO has since led a massive turnaround for the company, leading it out of bankruptcy and back to profitability in record time. Adamolekun has prioritized friendly customer service, brought back fan favorite menu items, and worked to increase the brands social media presence to improve traffic and gain new customers. AI is also playing a part in their comeback, announcing recently that they will be partnering with SoundHound AI to implement AI-powered phone ordering.
A revamped menu capitalizes on recent food trends on TikTok like seafood boils to appeal to Gen Z, in addition plans to undergo massive renovations to make locations more inviting. These efforts have already paid off for the restaurant company, reporting this summer that they expect to see a positive net income in fiscal 2026 of $2.1million.
The Path Forward: Connection Over Complexity
It’s undeniable that the restaurant industry is facing extraordinary changes to the landscape. Changing demographics, a push for more convenience, new channels of service, and an inflating cost of goods are all pushing restaurant companies to adapt in new and innovative ways. Prioritizing new growth opportunities, sustainability, convenience and efficiency, leveraging technology, and empowering your workforce will all be crucial as this sector evolves- and there’s no one right way to do it all. Each of these approaches have their own advantages, but a unique combination of all 5 is likely the best path to success for restaurants.
Whether you’re in need of help elevating your loyalty program or making sense of fragmented customer data, inteQ creates custom tailored solutions for all types of companies. Explore our recent posts to learn more about our services, as well as some helpful tips to empower your employees and take strides towards sustainability.
Reach out to inteQ to start building your custom program and achieving your goals.
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Citations
James Beard Foundation in collaboration with Deloitte, Resilience and reinvention: The state of independent restaurants in 2025, February 2025.
Lydian Anderson et al., “Share of one-person households more than tripled from 1940 to 2020,” US Census Bureau, June 8, 2023.
Deloitte, Restaurant CxO Survey. Survey was conducted in 2024 with ~150 restaurant executives across quick-service restaurants (QSRs), fast casual, casual, and fine dining brands.
Bobby Stephens et al., 2024 Consumer Loyalty Survey: The annual report on consumer loyalty expectations and preferences, 2024.
Vivek Kulkarni et al., Prompting for action: How AI agents are reshaping the future of work, November 2024
James Cascone et al., “Driving accountable sustainability in the consumer industry,” Deloitte Insights, 2022
Morgan Stanley, “Scaling up the impact of obesity drugs,” May 7, 2024.
https://www.npr.org/2024/05/20/1252426585/red-lobster-bankruptcy
https://www.allrecipes.com/red-lobster-new-seafood-boil-seasoning-11772669
https://www.restaurantdive.com/news/red-lobster-post-chapter-11-projected-financials/722320/