Washington restaurants’ profits plummeting, solutions are scarce

Anthony Anton, President and CEO of the Washington Hospitality Association, has raised concerns about the financial health of the restaurant industry in the state.

According to a 2024 report, while the national average profit margin for restaurants stands at 4%, Washington’s margin has plummeted to 1.5%, marking a 60% decrease.

Antone told KIRO Newsradio the decline is due to several factors.

“Increased labor costs, rising food and beverage expenses, and stringent regulatory requirements are all contributing to the financial strain on our restaurants,” he said.

He noted that menu prices in Washington are 12% higher than the national average, yet this has not been enough to offset the increased costs. Additionally, restaurants in the state employ 20% fewer staff than the national average, which has impacted customer service.

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The average full-service restaurant in Washington generates about $1.1 million in sales, but with the current profit margin, the average take-home pay for owners is only around $16,000 per year.

“Many owners are essentially working for free or at a loss,” Anton explained. “This is not sustainable, and it’s driving many out of business.”

Antone emphasized that the challenges facing the industry are not just financial but also operational.

“We’ve raised prices, but we’re hearing from guests that dining out has become too expensive,” he said. “At the same time, we’re employing fewer staff, which means the level of service has declined. It’s a no-win situation.”

Anton suggested several potential solutions to address these challenges. One approach is to adjust portion sizes to reduce costs without significantly impacting customer satisfaction. Another is to adopt new technologies to improve efficiency and reduce labor costs. However, he acknowledged that technology is currently unproven and expensive, making it a risky investment for many small businesses.

Anton called for greater transparency and patience from the public as the industry navigates these difficult times.

“Our guests were amazing during COVID-19, supporting us through outdoor dining and other challenges,” he said. “We need that same level of support and understanding now as we work to adapt and survive.”

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The Washington Hospitality Association is also advocating for policy changes to help alleviate some of the financial pressures on restaurants. This includes seeking relief from certain regulatory requirements and pushing for measures to address the rising costs of labor and supplies.

In the meantime, Anton urged restaurant owners to be proactive in managing their businesses.

“It’s important to stay informed and be willing to make tough decisions,” he said. “Whether it’s adjusting your menu, rethinking your staffing, or exploring new technologies, every little bit helps.”

As the industry continues to grapple with these challenges, Anton remains hopeful that with the right support and strategies, Washington’s restaurants can weather the storm and emerge stronger.

“It’s a tough time, but we’re resilient,” he said. “With transparency, patience and innovation, we can find a way forward.”

Bill Kaczaraba is a content editor at MyNorthwest. You can read his stories here. Follow Bill on X, formerly known as Twitter, here and email him here.