Why Fractional Gains Matter More Than Ever for Restaurants

The National Restaurant Association has predicted real sales growth of only 1.3 percent in 2026. Meanwhile, the cost of nearly everything is on the rise, from beef to packaging to energy. There is no volume cushion to absorb it.

That means that even small improvements can make a big difference. Saving one to two percentage points on labor or food, or nudging sales up by 4 percent can be the difference between a profitable year or a loss. The new playbook is about stacking fractional gains across every lever of the operation until the margin math works again.

This means aiming for granular improvements, yet it’s sometimes the difference between surviving or being left behind in this economy. The following are ways to find those fractional gains.

Controlling labor costs

Stop Staffing on Autopilot

Labor costs as a percentage of sales rose 1.4 points year-over-year, which amounts to a 6.3 percent relative increase. This is nearly double the national average.

Labor is the biggest cost most operators can actually control, and it’s also where the fastest gains can be found. While most operators think in terms of reducing headcount, it’s really about making sure the right number of people are working at the right times.

PAR Technology’s 2025 Annual Industry Report analyzed 30,000 QSR restaurants and found that dinner generates 267 percent more transactions than breakfast. Transaction volume varies by time of day, yet many operators staff all hours the same way, based on historical schedules that haven’t changed in years. That means too many people standing around at 9 am and not enough at 6 pm. Good restaurant management software quickly highlights these gaps so operators can adjust schedules to match when customers actually show up, rather than relying on habit.

Optimizing food orders

Order Smarter, Waste Less

Food cost is another controllable expense in restaurants that’s also commonly mismanaged. Most over-ordering and waste comes from not having a clear picture of what’s coming.

Instead of ordering based on what was ordered last week, order based on how busy it’s expected to be. If Tuesday is going to be slow, reduce the Monday order accordingly. It’s a simple concept, yet the challenge is getting that visibility.

Restaurant operations software that connects sales forecasts to ordering decisions makes this straightforward. Without it, operators are left guessing, which tends to lead to food sitting in the walk-in until it’s thrown out.

Another hidden factor is delivery. Delivery transactions have grown 383 percent since 2020. These orders often have a different mix of menu items than dine-in orders. Operators need to account for this channel in their overall strategy. Delivery impacts the menu, packaging costs, labor model and ultimately the margins

Customer relationship management

You Can’t Market to People You Don’t Know

Most QSR operators can identify about 20 percent of their customers. The other 80 percent pay and walk out the door without leaving a name, order history, or any way to bring them back in with an offer. In other words, most restaurants don’t have a relationship with the customers driving the majority of their sales. That’s a revenue visibility problem.

Loyalty transactions grew by more than 30 percent in 2024, driving an average 8 percent increase in profit. But, those results came almost entirely from the 20 percent of customers that operators already knew. Just imagine what’s possible with the other 80 percent.

Every kiosk order, mobile order and delivery transaction is a chance to learn who a customer is and what they like. Mobile ordering is up 368 percent since 2020 while kiosk usage is up 49 percent.

Operators can use those channels to build customer profiles and start sending relevant offers, measuring what works and turning one-time visitors into regulars.

Streamlining operations

Less Tools, More Insights and Action

There is a 6.4x profitability gap between a multi-unit operator’s best and worst performing stores. Operators know what their best stores are doing differently, but scaling those learnings across hundreds or thousands of locations is incredibly hard. The data needed to help close that gap already exists, but the challenge is how to access it fast enough to act on it.

On average, operators juggle 10-15 software tools. Each one generates data, yet few of them talk to each other in a way that gives operators a clear answer quickly.

The result is that simple questions, such as which locations are underperforming this week or where food waste is highest, can take hours to answer rather than minutes. By the time the report is built, the moment to act has passed.

The key is to move toward fewer, better-connected tools to get a single, clear picture of the business. The goal is to get the right data fast enough to do something about it. The next frontier is moving from insight to automatic action. Tools that only surface recommendations leave execution to the operator. The ones closing the profitability gap act on the data.

This is where context equity comes in. AI is only as powerful as the context from which it operates. Addressing this need requires an agentic AI layer trained on billions of transactions that connects the systems operators are already using to quickly execute on data at scale.

Small Wins Add Up

A 0.5 percent improvement in labor costs doesn’t save a restaurant. Neither does a 0.3 percent reduction in food waste, or a 2 percent lift from better loyalty offers. But all three together? That’s the level of margin recovery a 1 percent growth environment demands.

The era of growing fast enough to outrun your costs is over. The winning strategy now is relentless, compounding improvement across every part of the operation, one small gain at a time.

The future isn’t AI-first, it’s data-first systems that enable AI to function.

*Oliver “Oli” Ostertag is President, Growth Platforms and AI at PAR Technology, with responsibility for the company’s growth verticals, AI strategy, and operational execution. He leads PAR’s expansion into new markets and drives enterprise-wide initiatives to improve performance and scalability. He previously served as General Manager of Operator Cloud and led PAR’s international and business operations.

Prior to PAR, Oli was a corporate attorney advising large-cap private equity sponsors on complex, multi-jurisdictional M&A transactions across technology, financial services, and consumer sectors. A native of Germany, Oli brings extensive international experience across EMEA and APAC. He holds a BA in History from Brown University, a JD from the University of Pennsylvania Law School, and an MBA from the Kellogg School of Management at Northwestern University.