Uncertainty over tariffs and ongoing supply chain disruptions pose significant challenges for quick service restaurants (QSRs). From rising prices for ingredients to delays in sourcing essential supplies, these challenges add another layer of complexity to an industry built on efficiency, consistency and speed of service. One could argue that resilience—flexibility to adapt to volatility—is the new norm for the quick-service industry, requiring constant adaptation to shifting market conditions, consumer demands and global disruptions.
This article focuses on how QSRs can mitigate risks and manage costs despite the turbulence of shifting trade policies. In an industry where staying nimble is essential, those who adapt the fastest will not only survive but also gain a competitive edge.
Why Dining Out is Still a Staple
Despite higher prices, the simple joy of dining out with family still holds great value along with the sense of saving valuable time by using a QSRs. According to the National Restaurant Association, 90 percent of adults like going to restaurants because they can enjoy their favorite dishes with flavors that are difficult to recreate at home. In addition, many diners prioritize the overall experience over the cost of the meal.
This preference for dining out continues to drive consumer spending, particularly in the QSR sector. Industry sales nationwide are projected to reach $1.5 trillion. Restaurants that are thriving are expanding their footprint, opening new locations. Notably, franchise expansions saw a 2.2 percent increase last year.
Tariffs: Echoes of the Pandemic
When it comes to tariffs, many of the same supply chain challenges seen during the COVID-19 pandemic are resurfacing. From unpredictable pricing to logistical nightmares, restaurants are bracing for a rough ride as they navigate these hurdles.
Increased Costs and Consumer Impact: Higher tariffs on imported goods, including essential restaurant supplies such as cups, plates and napkins—many of which originate from China—are likely to drive up operational costs.
Supply Chain and Inventory Management Challenges: The industry needs better solutions for just-in-time replenishment of inventory at low cost. Leveraging data analytics for accurate demand forecasting and implementing optimized supply chain operations with the right technology can help businesses navigate inventory surges or shortages.
Transportation and Logistics Disruptions: Rising fuel costs, combined with unpredictable demand fluctuations, can drive up transportation expenses. This makes it even more crucial to plan deliveries efficiently—ensuring the right items, in the right quantities, arrive at the right time using the most suitable shipping method. For example, instead of shipping a full pallet of an item that lasts six months, it may be more effective to deliver six smaller cases over that period.
Optimizing Supply Chains Amid Headwinds
More and more QSRs are outsourcing to third-party logistics (3PL) providers which offer scalable solutions, such as real-time data tracking and analytics, cold chain management and demand-driven distribution.
QSRs can diversify their supplier networks by sourcing strategically—reducing their dependence on imports. At the same time, 3PLs can help brands capitalize on price fluctuations in transportation and inventory by combining volumes and dynamically adjusting supply chains to optimize service and cost savings.
Process Streamlining, Best Practices, and Centers of Excellence
Well operated QSRs are using the impact of tariffs as also an opportunity to improve their overall business. Continuous process improvement programs are helping identify steps that don’t add value for the customers or the employees.
Instituting metrics and key performance indicators help measure the success of the improvements. Identifying practices by restaurants in the QSR network that are resulting in better performance, and sharing those across the network can help improve financials. Businesses are centralizing functions and creating centers of excellence to improve field operations while reducing corporate cost.
The Role of AI, Automation and Strategic Outsourcing
By leveraging artificial intelligence (AI) and machine learning (ML), QSRs can optimize inventory management with greater precision. AI-driven inventory forecasting allows operators to analyze historical sales data, predict demand fluctuations and adjust stock levels. Agentic AI solutions can be applied to automate tracking, decision making and execution.
Automated storage and retrieval systems (AS/RS) and AI-powered routing software enhance the speed and accuracy of logistics, reducing lead times and operational costs. Centralizing live management of the end-to-end supply chain, including last-mile logistics operations further enhances customer experience by streamlining processes and improving efficiency.
The Road Ahead: Adapting to Uncertainty
New complexities—such as rising tariffs—continue to test the resilience of QSR supply chains. QSRs are leveraging advanced technologies, optimizing transportation networks and strategically positioning inventory near high-demand locations at accurately forecasted levels. Continuous Improvement programs can help reduce waste and enable sharing best practices, while centralizing functions that can be optimized and automated.
Ultimately, the businesses that will thrive are those with adaptive, data-driven supply chains that employ automation, AI and other cutting-edge technologies to drive efficiency. Mature 3PLs can help businesses analyze every functional area, set measurable goals and ensure accountability for better execution. As tariffs and costs fluctuate, maintaining a resilient supply chain will be key to avoiding slow product flow and achieving effective cost management.
Manish Kapoor, Founder and CEO of Growth Catalyst Group (GCG) of Companies, a global leader in technology-powered supply chains for fulfillment, logistics, and marketing execution. Kapoor is credited with transforming last-mile delivery and supply chain strategies through technology, data-driven insights, and customer-centric solutions. With over 25 years of experience driving innovation and operational excellence at Amazon, FedEx, and others.
