The economy gained nearly 63,000 restaurant and bar jobs in December and January. But the industry had no time to get comfortable because it lost nearly all of them by the end of February. 

In the grand scheme of things, this change wasn’t insane, and the numbers are still preliminary, but on face value the sector hadn’t seen drops that big since the dark days of the pandemic. 

Restaurant and bar jobs seem to have roughly tracked restaurant and bar sales over the past three years, and sure enough, retail sales in the industry have mostly fallen since November — and they dropped sharply, by 1.5%, in February.

“We definitely were not as busy as we would have liked to have been in January and February,” Jason Smith said. He’s the owner and chef at Cantina 18 in Raleigh, North Carolina. It’s been there for 15 years. North Carolina’s hiring trends mirrored the national numbers pretty closely.

Smith puts some of this down to weather. In January, it was sub-zero or snowing all the way down into Florida.

“I have a lot of empty nesters and, you know, older clientele, and when it’s, you know, 25 degrees five days in a row, a lot of those folks just don’t go out, understandably,” he said. “We closed, I think, two nights and closed two or three shifts. You know, the snow’s, it’s expensive.”

But it may have been more than just the snow at work here.

“February is where we start to see a definitive shift in consumer behavior,” said R. J. Hottovy, head of analytical research at Placer.ai. Placer uses anonymized mobile device data to analyze foot traffic, and Hottovy zeroed in on restaurants.  

“Visitation trends for really every restaurant category were down year over year,” he found.

This was around the same time that consumer sentiment surveys showed people were getting extra-anxious about the economy. Hottovy said that’s not a coincidence.

“People are asking a lot of questions about the direction of the economy. I think that’s certainly had an impact on things. And the reason why we believe that is because it was so widespread across a lot of retail and restaurant categories,” he said.

The possibility of tariffs pushing up prices is one source of that anxiety for customers. It’s also a source of anxiety for the restaurants themselves. Especially if they get certain foods from, say, Mexico.

“I am a lowly guacamole salesman,” said Smith. “I also am a lowly tequila salesman, so I am more than puckered up about it, yes. But nothing’s happened yet, so let’s just hold on before we panic.”

Some restaurants are trying to plan — negotiating with vendors, consolidating products, planning large buys to stock up.  

Amber Moshakos, president of LM Restaurants, which has 34 locations in the Southeast, said she’s spent a lot of time and energy on planning.

“You know, if we get tariffs on tequila and Mexican beer, all right, we have a formula, we know how to respond, we know what to do,” she said.

Planning for specific tariffs is tough when they change by the day or even the hour.

“And so instead of trying to get all wrapped up in this go-no-go, stop-start mentality, our focus is just creating an agile organization. So no matter what happens this year, we’re prepared,” she said.

The one thing Moshakos said she cannot do is pass costs on to customers. “It’s going to be our last option.”

That’s the bind a lot of restaurants are in — customers might just lose it if menu prices start soaring again.

“The primary headwind to customer traffic formation at restaurants has been inflation,” said David Portalatin, food industry adviser for market research firm Circana. Price hikes are a no-go for another reason: The restaurant landscape has become more competitive.

“There’s actually more restaurant locations, but less traffic than in 2019,” he said.

Restaurants do have options, especially if just a few of their ingredients are hit by tariffs. “They can reformulate their recipes, they can swap product in and out,” said Rich Shank, senior principal at Technomic.

And despite the rough start, a lot of analysts say 2025 may turn out OK for restaurants. “We are predicting modest levels of growth this year,” Shank said.

Because, he said, people still need to eat, and after all the adapting restaurants have had to do over the last five years, they’ve become pretty good at it.