Restaurant chains are ordering less. Here’s why—and what you can do about it.
According to ArrowStream customer data, over 80% of foodservice chains decreased their product orders in Q1 2025 compared to Q1 2024.
That drop in purchasing isn’t happening in a vacuum—it reflects broader economic shifts. While overall consumer spending has remained somewhat stable thanks to continued service-sector spending, including restaurants, there are clear signs of caution. Inflation in core goods, rising credit card debt, and growing economic uncertainty have shifted consumer behavior. Even loyal diners are trading down, skipping appetizers, or visiting restaurants less frequently.
Operators are feeling it. According to recent industry data from the National Restaurant Association’s 2025 State of the Restaurant Industry Report:
- 61% of restaurants reported a decline in customer traffic between 2023 and 2024
- 39% say their restaurant was not profitable in 2024
- 53% are still carrying debt from the pandemic
- Food and labor costs have surged over 30% since 2019
In this kind of environment, restaurant operators can’t afford to leave supply chain decisions up to chance.
The Bigger Picture: Demand Softening Across Segments
From quick-service to fast casual and full-service, restaurants are under pressure from softened demand. It’s not just about lower sales—it’s about lower throughput across the board.
This demand shift triggers costly challenges up and down the supply chain:
- Excess inventory and deadstock increase waste and spoilage.
- Forecast inaccuracies lead to costly stockouts and over-ordering.
- Squeezed margins make it harder to recover from even minor inefficiencies.
When fewer guests come in the door, every case, ounce, and dollar matters more than ever.
In today’s environment, sticking to outdated strategies isn’t just inefficient—it’s costly. Here’s the difference between staying the course and taking a smarter path forward:
How Chains Are Responding
The most strategic restaurant brands aren’t just reacting—they’re rethinking their entire procurement approach. Here’s how leading chains are staying ahead of the curve:
- Category Spend Optimization: Focus on the categories that matter most. Review contracts, identify top-spend areas, and eliminate purchasing waste where it hurts margins most.
- Inventory Visibility: Real-time data empowers teams to avoid excess inventory, spot usage patterns, and shift products where they’re needed—before they expire or go unused.
- Menu Rationalization: Simplifying the menu by removing low-performing items not only reduces prep complexity—it also aligns ordering to actual demand.
- Promotion ROI: Chains are being more selective about which LTOs and promos they run. With thinner margins, only high-ROI efforts earn their place.
- Supplier Collaboration: Operators are leaning into more transparent supplier relationships. Shared data and demand forecasting help both sides adapt faster to market shifts.
Why Visibility Matters More Than Ever
This is where ArrowStream shines.
ArrowStream gives multi-unit and franchise restaurant operators the insights they need to make data-driven decisions with confidence—especially when the pressure is on. Our technology is purpose-built to help restaurants operate leaner and smarter with:
- Inventory Management: View network-wide stock levels in near real time, flag potential waste, and improve order accuracy.
- Category Optimization: Analyze purchasing trends and opportunities to reallocate spend toward better-performing products.
- Contract Compliance: Ensure what you’re paying matches what you negotiated—every invoice, every product, every time.
In an unpredictable market, visibility is no longer a luxury—it’s a competitive necessity.
The Bottom Line
Operators can’t rely on pre-pandemic playbooks. Traffic is down, margins are thin, and every misstep carries greater weight. But with the right strategies and tools, restaurant chains can adapt quickly and protect profitability—even in the face of economic uncertainty.
As the industry adapts to a more cautious consumer, now is the time to make supply chain operations leaner, smarter, and more aligned to real-world demand. ArrowStream is built for exactly this moment.
Want to see how ArrowStream can help your team respond to demand shifts with precision? Get a demo or click here to connect with an ArrowStream expert today.
