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Restaurants Are Finding Ways to Meet Evolving Customer Expectations

Our Most Compelling Data:

63%

of consumers said they’ve cut spending on restaurant purchases, including in-person, takeout, or delivery, in the past 12 months.

98%

of restaurant leaders said they’ve added or expanded their discount or value offers in at least one way to respond to current economic challenges.

As restaurants meet diner expectations, owners are exploring new levers to pull

Over the last year, higher operational costs have put a lot of pressure on restaurant owners to turn a profit, pay staff, and retain customers who’ve said they’ve cut back on spending.

Restaurant leaders have turned to value and limited-time deals to keep foot traffic coming through the door. In fact, at least one-third of all restaurant leaders we asked said they instituted eight different types of programs for diners, from loyalty program discounts (43%) to value items and combo deals (38%) to coupon codes (33%).

Many of these discounts have proven popular, but they’ve created new diner expectations. While diners told us they were generally satisfied with their experience in different restaurant formats (from 82% satisfaction with dine-in experiences to 72% satisfaction with delivery), nearly half of those consumers now expect restaurants to keep or add to their current value offerings over the next year.

But what diners expect and what they’re offered might not match up in 2025. That’s because 71% of restaurant leaders told us they plan to increase their prices over the next 12 months, likely because they can’t afford to handle the increased burden of food and wage costs.

While this conflict won’t necessarily lead to more people eating at home, it will likely force restaurant operators to become amateur mathematicians (even more than they already are) to make sure they’re protecting their margins while offering customers a taste of the discounts they crave.

Key takeaway:

If your eyes are glazed over thinking about going through your spreadsheets for the 500th time, take a deep breath and know that help is out there.

Start with your point-of-sale system provider and see if their analysis tools can give you feedback on cost leaks and optimal pricing strategies based on your business’s data. Then, make some educated guesses and start testing. For instance, you may find diners won’t blink at a higher price on a top-selling menu item — something you know they already love — compared to raising prices on every entrée.

Pro tip:

When you use Square for Restaurants and the Square Dashboard app, you can easily access your business data through real-time reports, compare business by time period, see sales by location, and more. This can help you make informed business decisions that boost your bottom line.

Tucked away in a pocket of St. Louis called The Hill — known as the city’s Little Italy — is the original location of Gioia’s Deli. Co-owners and high school sweethearts Alex and Amanda Donley inherited the century-old, family-run business from Alex’s parents in 2014, making the couple the newest generation to own one of the city’s oldest restaurants. In keeping with tradition, the Donleys made it a point to keep certain hallmarks the same, like its James Beard award-winning hot salami sandwich recipe.

Together, they boosted their catering business by 500% using Square restaurant technology. To hit that business milestone, paying attention to their sales data via Square reporting features was essential. It’s something they continue to do to maintain a thriving business.

Now, instead of having a meeting about our gross sales, we’re getting more granular with these reports. We know that last February we sold this amount of hot salami, and this February we sold this amount. What’s the difference? What did we do wrong? Or what did we do right? It makes us a more efficient business, which ultimately makes the customer experience better.”

– Alex Donley, co-owner of Gioia's Deli, St. Louis, Missouri, USA

Restaurant leaders and consumers don’t agree on fees

Deep down, diners know restaurants’ prices — like so many things in life — will tick up.

But the choice to charge a range of additional fees at the bottom of the check may be the largest disconnect restaurants have with diners today.

More than half of consumers surveyed told us they found fees for credit or debit card usage (59%), kitchen appreciation fees or living wage surcharges (53%), and minimum tip settings when paying (52%) unacceptable on some level. And, more than one-third of restaurant leaders told us they’re charging each of these fees.

This highlights how communication behind pricing strategy has become so important for restaurants. While the recent economic pressures create pricing challenges, the explanation of fees has the potential to turn off diners. While some states have already passed laws about how fees must be communicated, restaurants still need to think carefully about how they will be perceived by their core diners. And they should be ready to pivot quickly.

Key takeaway:

If you have to charge fees (after all, many are mandatory) as opposed to adding your extra costs to your menu prices, giving a clear explanation of why you’re doing it could improve how people feel about your business.

Consider explaining why these charges are necessary on your website and printed menus to help customers understand what they’re paying for. Of course, not everyone will like it, but you may get more credit for transparency than you think.