Diners want deals

Staffing headaches, rising costs and deal-hungry diners—restaurant pressure points keep shifting, but one thing is clear: value is king.

This week, we’re diving into why the “No Tax on Tips” law won’t fix the industry’s ongoing staffing crisis and how diners’ current obsession with value is changing the game. With deal-seeking at a 50-year high and staff turnover still hovering above 120%, operators are being forced to rethink everything from scheduling and pay transparency to menu strategy and guest perception of value.

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Why new tax laws won’t solve the restaurant staffing crisis

The “No Tax on Tips” law seems like a win for front-of-house employees, but it doesn’t address core staffing challenges that are currently facing most operators. Turnover hovers at about 122% thanks to unpredictable scheduling and inconsistent pay, which are still pushing workers out. Operators should focus on better tech integration, transparency and a healthy workplace culture to help bolster retention.

Why it matters: Restaurant owners can’t rely on tax policy to solve labor issues. Staffing is central to guest experience, consistency and profitability. Investing in smarter scheduling, unified systems, pay transparency and employee recognition reduces turnover, improves morale and lowers hiring costs. These strategies turn short-term fixes into long-term stability. (Modern Restaurant Management)

Diners are seeking deals at the highest rate in 50 years

Value is the most important thing to diners in 2025, according to Circana data. Nearly 30% of restaurant visits are now tied to deals—the highest rate in 50 years. Restaurants like McDonald’s, IHOP, KFC and others have aggressively leaned into value promotions as traffic falls. Deal-seeking has risen approximately 3.1% since 2022, which should make it top of mind for your business.

Why it matters: For restaurant owners, this signals a sharp shift in consumer behavior toward value. Relying solely on standard pricing strategies may erode traffic. Incorporating compelling deals, bundling value and reinforcing perceived value (via quality, service, ambiance) will be essential to retain customers and mitigate margin pressure. (Nation’s Restaurant News)

Embracing "Sober October" unlocks new revenue streams

“Sober October” is gaining traction, especially with Gen Z and millennials, as U.S. drinking rates continue to drop. Spotlighting alcohol-free and functional beverage options or promoting mocktail pairings can help attract new customers. Emerging behaviors like “bookending” and “zebra striping” (alternating alcoholic and non-alcoholic drinks) can drive guest dwell time and revenue.

Why it matters: For restaurant owners, embracing sober-curious trends can unlock new revenue streams and retain guests who might otherwise stay home. Equal visibility for non-alcohol options signals inclusivity, supports health-conscious consumers and diversifies the beverage program. In a tightening market, innovative drink menus can become a competitive differentiator. (MRM)

62%

The percentage of restaurants that have raised menu prices to offset wage increases. (Expert Market)

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The Prep is written by Kelly Dobkin and edited by Lesley McKenzie.