If you want to take the temperature of America’s restaurants, watch Sysco (SYY+0.36%).
The Houston-based giant is the largest U.S. supplier to restaurants, hospitals, schools, hotels, and cafeterias — delivering everything from fresh steaks to paper napkins. As the middleman between farms, manufacturers, and dining rooms, Sysco is so ubiquitous that if you’re eating out — especially at a chain or institution — there’s a good chance they supplied the bun for your burger, the ketchup packet for your fries, and even the to-go container for your leftovers.
They stock or have stocked every kitchen from your local Applebee’s (DIN-1.45%) to KFC (YUM-0.31%) and The Cheesecake Factory (CAKE-2.51%). So when people start eating out less, Sysco feels it fast.
In its earnings report released Tuesday, Sysco slashed its 2025 sales growth forecast by nearly 30%, lowering guidance from 5–7% to just 3.5–5%.
Total case volume in its U.S. foodservice segment — essentially, how many shipments Sysco is making — declined 2%, as customers trimmed orders and Sysco paused select business investments. The company cited “California wildfires, significantly adverse weather, and more recently, weakening consumer confidence” as contributors to the “negative impact on foot traffic to restaurants.”
According to the National Restaurant Association, just 18% of restaurant operators reported higher same-store sales in February 2025 compared to the previous year — down sharply from 51% in January. Meanwhile, 63% said sales fell, up from 35% in January.
The message seems clear: restaurants are ordering — and serving — less. While consumer spending has held up better than expected in other areas, inflation and high interest rates may finally be pressuring discretionary categories like dining out.
It may not be a full-blown restaurant recession — yet. But Sysco’s revised forecast could be the canary in the kitchen.
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