A new year means renewed hope and strategies. For the restaurant industry, they need a clean slate after a trying 2024. New executives have been assigned, different items are on the menu, and some fresh IPOs are on the horizon. It will be a time of change as each company evaluates where they stand and what they need to do to win back customers. Will these changes be enough or will consumers still hold back?

Last year saw a slew of executive level changes in the restaurant industry. Some were shocking and most were in response to repeatedly poor quarterly sales figures. It was clear that many companies were seeking a new vision through some challenging times. Papa John’s new CEO is one of many that is trying to change the negative image that restaurants have received over the last year. Of course, changes are never implemented immediately, and these new appointments were designed to improve things for 2025. Now that we have arrived in the new year, it’s time to see if these newly minted executives have cracked the code on how to get restaurants back on track.

It’s no secret that eating out is still expensive and no one is expecting that to change drastically this year. There is still a clear divide in approaches to this problem. Most restaurants have pivoted to value meals and menus that showed a lot of promise last year. In some cases, they are becoming permanent additions or are receiving significant upgrades for 2025. McDonald’s, the pioneers behind las year’s value craze, have decided to make a new an improved value meal a permanent addition after initially planning to offer it only for a few weeks last summer. The other main approach has been from establishments that see their product as premium and refuse to offer a value version.  Starbucks has taken this approach, believing that customers value the taste, service, and consistency they receive at every location. The company believes that offering a value option would undermine their brand and compromise their ability to deliver their signature product. These chains are instead focusing on service quality in order to convince customers that the product they are receiving is unique and worth the higher price.

Another major divide in 2025 has been the menu. Some are embracing the concept of simplicity and are paring back menus to include basic items and a few seasonal ones. Outback Steakhouse has made the decision that their menu is too large. Instead of being all things to all people, the company wants to get back to their steak and seafood core experience. This approach has brought down operating costs and increased service times and the quality of the product. So far, it appears that many of the companies that have taken the premium product approach are also embracing the simpler menu. Other companies have expanded menus by introducing a revolving door of limited time options. These new options are fresh, yet the limited time availability is drawing customers in. Constantly changing menu items can be taxing on operational costs and efficiency, yet there is a belief that customers are always looking for the next best thing. Taco Bell and Pizza Hut are two of the leaders in this category that constantly add twists to existing favorites. In the case of Taco Bell the limited nature of some of their items often causes a social media explosion. The ones that are expanding menus are usually the same ones who look at value options. Increasing the total customer base is their strategy for success.

Another telling sign that the restaurant industry was struggling was the lack of IPOs last year. This is no surprise as many public companies who faced falling sales were forced into leadership changes due to shareholder pressure and public perception. It’s understandable why a private restaurant would be unwilling to step into that arena. For 2025 we already have the rumblings of some IPOs on the horizon. Twin Peaks could be the first restaurant that makes a public debut this year. As we have seen in the past, it only takes one corporation going public successfully to create a domino effect. It could happen again this year, especially if customers start to return and are receptive to all the changes the businesses are making.

It certainly seems that the restaurant industry has drawn up bold strategies to revitalize itself this year. Some of these strategies are diametrically opposed, yet they could all hold value to different consumers. As difficult as it has been to secure customers, it seems that nothing is off the table when it comes to changing perceptions. There is still much work to do, yet the optimism around the restaurant industry is an encouraging sign for a profitable 2025.