Toast Data: Holiday Parties Fuel Catering Boom for Restaurants

• Holiday catering gets more popular

• Philly and Chicago restaurants saw healthy growth, Tampa and Denver slowed amidst local challenges

• Restaurant wages continued to rise slightly, though tips were flat

BOSTON, MA — Toast (NYSE: TOST), the all-in-one digital platform built for restaurants, released its Q4 2024 Restaurant Trends Report, providing insight into the state of the U.S. restaurant industry through an analysis of aggregated data from selected cohorts of restaurants and in select U.S. cities on the Toast platform, which serves approximately 134,000 restaurant locations as of December 31, 2024. Read more details about our methodology below.

Key takeaways from Q4 2024:

• Same-store catering transactions increased 26% YoY, and ticket size increased 9% YoY

• Tampa experienced a 6% decrease YoY in overall transactions due to three major storms that hit the area between August and October

• Chicago and Philadelphia both increased overall transactions by 3% YoY 

• Median base hourly wages for back-of-house employees at full-service restaurants were approximately $16.98 in December 2024, which is about 2.5% higher than in December 2023

• For the third quarter in a row, tips at full-service restaurants averaged 19.3%

*Year-over-Year (YoY) compares Q4 2024 to Q4 2023.

Holiday catering orders continue to rise

• The “busy season” for holiday catering boosts growth during off-peak days

Catering delivered some serious wins in 2024. The number of same-store catering transactions increased 26% in Q4 2024 compared to Q4 2023, while ticket size increased by 9%. 

Zooming out, the year's final quarter is the busiest for catering orders, driven mostly by mid-week orders ahead of holidays. With the pre-holiday rush in full swing, the weeks before Christmas and Thanksgiving were the busiest times for catering orders, a similar trend to last year. Because these orders tend to come in during weekdays, it’s a great opportunity for restaurants looking to supplement their revenue when their dining rooms are less full. 

About 37%* of all catering orders in 2024 occurred in the last three months.

*Insight reflects a snapshot of all catering orders in 2024 vs. a cohort of same-store restaurants on the platform since Q4 2023.

How Tampa restaurants are recovering after hurricane season

• Back-to-back hurricanes in late 2024 disrupted Tampa restaurants, slowing transactions

• The City of Brotherly Love loves to eat out

Restaurant transaction growth in Q4 2024 varied in the 20 cities that Toast explored, with the most dramatic slowdown occurring in Denver (-9%) and Tampa (-6%). Axios reports that restaurants in Denver have struggled to keep up in recent years, with experts pointing to new wage laws, increased rent, cost-conscious diners, and shrinking profit margins.

As for Tampa, growth in Q4 was likely hindered by three hurricanes that hit the Tampa Bay area in quick succession, leaving hundreds of thousands without power. Storms Debby, Helene, and Milton landed between August and October 2024 and significantly impacted the area.

On the flip side, Philadelphia and Chicago grew transactions by 3% in Q4 2024 compared to Q4 2023. 

The state of restaurant wages and tipping in America

• Back-of-house wages for full-service restaurant employees rose slightly

• Tips at full-service restaurants remained flat

Toast analyzed hourly wages for back-of-house restaurant workers at full-service Toast restaurants utilizing Toast Payroll & Team Management.

The median base hourly wages for back-of-house employees at full-service restaurants—from dishwashers to line cooks—were approximately $16.98 in December 2024, which is about 2.5% higher than in December 2023 and 6% higher than in December 2022. 

Depending on local laws, these employees might not be eligible for tips or gratuities. Some restaurants impose percentage-based fees on their menus to help compensate these employees when business gets busy.

For the third quarter, tips at full-service restaurants averaged 19.3%, while tips at quick-service restaurants, where guests may be less inclined to tip due to the difference in service, averaged 15.8%. This is down from a pandemic high of 16.5% in 2021.

There are plenty of reasons why people tip or may choose not to. Tips leveling off at restaurants is likely due to a combination of factors, including prices, people being more conscious about their discretionary spending, changes in minimum wage laws, and being asked to tip at more establishments than previously. 

Tipping rates are from applicable restaurants on the Toast platform, where a tip was added to the order via a card or digital payment. Cash tips and transactions without tips are not included in the analysis. 

For another quarter, Delaware was again the best state overall for tipping, with a total average tipping percentage of 21.9% in Q4 2024, up from 21.2% in Q3 2024.

California is again at the bottom of the list for overall tips in Q4, averaging 17.3%, the same as in Q2 and Q3 2024.