After Bankruptcies and Dining Slump, Restaurant Industry Pins Hopes on 2025 Turnaround

As the restaurant industry continues to navigate a challenging year, executives are eagerly awaiting the start of 2025, hoping for a better year ahead. Despite a 50% surge in restaurant bankruptcies and declining traffic to restaurants, there are signs of green shoots emerging. Jeanne Muchnick / USA TODAY NETWORK via Imagn Images

At the Restaurant Finance and Development Conference in Las Vegas this week, Inspire Brands CFO Kate Jaspon expressed optimism about the upcoming year, stating, "I don't know about you guys, but I'm ready for '24 to be behind us, and I think '25 is going to be a great year."

Data from industry trackers reveals an improvement in sales from summer lows, with fast-food restaurants seeing a 2.8% increase in traffic in October compared to the same period last year. This rise, combined with lower interest rates, has sparked optimism for growth. restfinance.com

Shake Shack's development plans remained robust despite recent interest rate hikes, according to the company's CFO, who anticipates a "big boost" in consumer spending as rates decline."If credit becomes cheaper, people feel like they can borrow more, even though it doesn't make sense that it would necessarily drive a $5 burger spend. It's just the psychology behind it," CFO Katie Fogertey explained in a CNBC interview. Tdorante10 / Wikimedia

However, the industry is not without its challenges, with value wars expected to continue into 2025, putting pressure on restaurant profits and intensifying competition between chains. Additionally, while a recession is unlikely next year, consumer spending may take longer than anticipated to recover from high costs. Dirk Tussing from Chicago IL, United States / Wikimedia