June 13, 2025
This month we look at: Brussels sprout prices, what factors to consider with sales forecasting, the potential impact of no taxes on tips, inflation and national restaurant sales trends from May.
We're halfway through the year and June has already been a jam-packed month, even just thirteen days in!
There's been quite a bit of political buzz impacting our industry as of late, namely the One Big Beautiful Bill making its way through the Senate and how parts of that bill will influence our industry (more on that below!), as well as ICE raids impacting restaurants and food service businesses across the nation. Last month, we included resources about knowing your rights as an operator, and as news of those happening has become more prevalent, we're linking those again here.
June is Pride month! So we've updated our Pride Month Gift Guide, highlighting some incredible products brought to us by LGBTQ-owned, operated and allied restaurant businesses. Head here to check it out and show your support!
Wishing you all a very safe and profitable rest of June and Fourth of July! We'll see you next month!
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- Rachel & the MarginEdge team
P.S. If you took our very, very accurate Restaurant Personality Type quiz, your June mantras are here!
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MONTHLY SALES METRICS & UPDATE
The trailing 4-week (28-day) average of year-over-year (YOY) sales for Fast Casual came in at +2.25% and Full Service at +0.51% at the end of May, compared to 2024 sales.
Food costs averaged 27% of sales last month, reflecting a 1% drop from April's average.
ITEM TO WATCH
Brussels sprouts
Did anyone notice higher food costs on their crispy Brussels sprouts apps last month? You're not alone! Median Brussels sprouts prices per pound increased by +12% from six months ago and +30% from a year ago for MarginEdge customers.
The reason? Seasonality. Brussels sprout prices went up last month because they’re out of season right now, meaning there’s not much being locally grown in the US. Most of the sprouts we're getting are coming from Mexico, which makes them pricier due to shipping and import costs. With fewer options and extra expenses, prices have naturally climbed.
Fountainhead Pub | Vancouver, Canada
ASK [me] ANYTHING
What factors should feed into sales forecasting?
It's pretty easy to understand why having a well-tuned sales forecasting model is game-changing for restaurant operations. In the past, robust forecasting models were only available to operations with lots of resources and dedicated people to run them, i.e., often not achievable for smaller, independent restaurants. Thanks to AI, that is all changing.
But before running to ChatGPT to tell you how many steaks to order for next weekend, what are the factors that play into having a robust and accurate forecasting model? Let's break them down:
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Historical sales data
This is the best place to start. Use past sales figures to identify trends, peak periods, and slow seasons. This data offers a solid foundation for future predictions when looking at similar time periods for last week, last month and last year. -
Seasonality
Account for fluctuations caused by seasons, holidays, and specific dining trends. For example, summer might bring more outdoor diners, while winter could favor comfort food. -
Local events and tourism
Is Taylor Swift coming to town with another run of her Eras Tour (a girl can dream)? Factor in how nearby events like concerts, festivals, or sporting events can increase foot traffic, or how a drop in tourism might lower sales. -
Day of the week and time of day trends
Patterns can vary widely by day (e.g., busier weekends) and time (e.g., peak hours during dinner). Analyze these nuances to enhance accuracy. -
Menu pricing and changes
Consider the impact of introducing new items, removing underperforming dishes, or adjusting menu prices. Menu revitalization can influence customer purchase patterns. -
Marketing efforts
The Keith Lee effect is very, very real, so be sure to include forecasts for upcoming promotions or advertising campaigns and assess their ability to draw in new customers or increase repeat business. You can use sales data from what happened after implementing past marketing campaigns to help predict future outcomes. -
Economic conditions
This one is a bit more difficult to pin down, but changes in the local or national economy, such as unemployment rates or inflation, directly affect consumers' dining-out budgets. -
Weather Patterns
Weather impacts customer habits, such as increased business during pleasant conditions for patios or lower in-store sales, but higher delivery on stormy days.
By integrating these factors, restaurant operators can craft a more accurate, dynamic, and actionable sales forecasting model. If you're a MarginEdge client and are interested in learning more about our recently released Sales Forecasting tool, you can read more about that here!
💬 Ask [me] anything!
Really. Each month we’ll take a look at the questions we get and answer one here. Have a question about our product, accounting, or restaurant operations in general? 💌 Email me or message us on our social media channels.
Bento | Multiple Locations, FL
THE ECONOMY
Inflation Up
The May 2025 Consumer Price Index (CPI) report is in, and indicates the following month-over-month changes in food inflation:
- Overall Food Inflation: Up 0.3% from April, and is up 2.9% YOY.
- Food At Home: Up 0.3% from April, and is up 2.2% YOY.
- Food Away from Home: Up 0.3% from April, and is up 3.8% YOY.
- Limited Service Meals: Up 0.3% from April, and by 3.5% YOY.
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Full Service Meals: Up 0.3% from April, and by 4.2% YOY.
Overall, inflation came in at 0.1% up from April, putting year-over-year inflation at 2.4%, a 0.1% increase from last month's YOY. Economists aren't planning on rate cuts any time soon, but are still optimistic for the upcoming September Fed meeting.
Tl;dr - All food inflation increased slightly last month - no big changes or swings.
Acropolis Greek Taverna | Tampa, FL
'TIS THE SEASON
What no taxes on tips could mean for operators
The One Big Beautiful Bill has made its way to the Senate for revision and approval, and with it comes a lot of initiatives, including a few that directly impact our industry, namely no taxes on tips and no income tax on overtime pay.
It is incredibly unlikely that the bill will pass as is, so the proposed terms are likely to change. That being said, it does give us a good indication of the kinds of changes Congress is looking to make. So, we asked our friends at Kaizen CPAs to help explain what the proposed terms would mean for operators and their teams. Here's what they had to say:
What the proposed bill means for you and no taxes on tips:
- You can’t stop reporting tips.
- You’ll need to update W-2s to show tip income separately.
- Your payroll system might need a tweak to handle it.
No Federal Income Tax on Overtime Pay
This is a big one, especially for kitchens and salaried employees who often log long hours.
What’s proposed? Overtime wages (hours over 40/week) would
- Not be subject to federal income tax
- Still be subject to Social Security & Medicare taxes
- Apply retroactively to Jan 1, 2025, through the end of 2028
What this means for you:
- You’ll still calculate and pay OT as normal.
- Payroll may need updates for new tax handling.
- More employees may be willing to work OT.
✨ Bonus: Other small business benefits in the bill
There are a few more items in the bill that could benefit restaurant owners:
- Section 179 Expense: Write off more equipment and improvements in the year you buy them — the limit is going up.
- SALT Deduction Cap Increase: The state and local tax deduction cap could rise from $10,000 to $40,000. Helpful if you're in a high-tax state.
To learn more, check out Kaizen CPAs here.
What's [me] into😂 WHAT WE'RE LAUGHING AT
📖 WHAT WE'RE READING
🎧 WHAT WE'RE LISTENING TO
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