Restaurant Industry Market Update with Sam Oches
In a recent episode of The Restaurant Report, host Paul Barron sat down with Sam Oches, Group Director of Editorial at Informa's Restaurant & Food Group, to discuss the state of the restaurant industry in early 2025. Their conversation covered several pressing issues, from recent corporate layoffs to tariff impacts and the evolving role of technology.
The discussion began with an examination of widespread corporate layoffs across restaurant brands, including Starbucks, Panera, and Bloomin' Brands. Oches noted this trend is part of a broader movement toward efficiency that had already swept through the tech sector in 2023. He suggested these restaurant companies are now responding to profitability pressures by streamlining corporate structures while being careful not to cut positions that directly support restaurant operations.
Tariffs emerged as another significant challenge, with President Trump's recent increases on Canadian aluminum and steel potentially signaling more to come. The National Restaurant Association has warned these tariffs could cost the industry upwards of $122 billion. Oches highlighted how companies like Chipotle are diversifying supply chains in response, but questioned how long chains can hold the line against raising prices when margins are already declining and consumers are showing price sensitivity.
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On technology integration, both Barron and Oches acknowledged its crucial role in addressing labor challenges, but Oches pointed to an interesting study showing 28% of operators aren't seeing proper ROI from their tech investments. "We got top-heavy with our tech stack," Oches explained, suggesting the industry is experiencing some "tech fatigue" as companies reassess which technologies truly impact the bottom line versus those that merely shift tasks without creating value.
The conversation turned more optimistic when addressing hospitality and growth projections. While Oches initially expressed concern about volatility and unpredictability affecting 2025's growth outlook, Barron offered a contrarian view, suggesting potential interest rate reductions later in the year could stimulate capital expenditure and unit growth. Both agreed that regardless of broader economic conditions, emphasizing hospitality remains critical for differentiation.
Wrapping up their discussion, they explored the staying power of third-party delivery platforms. Despite high fees and data-sharing issues, both acknowledged these services saved countless restaurants during the pandemic. However, Oches noted consumer price sensitivity might eventually force changes: "The only thing that forces the hand of these third-party companies is if consumers just say 'forget this, this is not worth it,'" suggesting economic pressures could reshape this relationship in the coming months.
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