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Restaurant Industry Report from Square
Data Shows How 2025’s Economic Volatility Is Impacting the Restaurant Industry New Square insights show that tipping is falling and quick service restaurants maintain the strongest margins Today, Square unveiled new data on the restaurant industry in 2025, which is finding its footing amid economic uncertainty. As consumer confidence dips, so does tipping In Q1 2025, Square found that the average tip on food and beverage transactions was 15.17%, and this continued to fall into Q2 with the average tip coming in at 14.99%, aligned to dropping consumer confidence in the economy.
“As consumer confidence in the economy shifts and tips fall, workers are taking home less which could lead to a return to labor uncertainties for the industry – adding to the crunch local restaurants are continuing to feel.” Labor margins ranged from 19% to 26% amid 2024 and early 2025, and they peaked during holiday periods, reflecting the intensive and variable staffing needs of fine dining. In partnership with Paperchase, Square is offering restaurants a seamless path to smarter operations through deeper financial insights and streamlined bookkeeping.
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