The current challenges facing Seattle restaurants have led to reduced operating hours, fewer staff, reduced menu choice and higher costs for customers
We asked Seattle restaurants: What would the impact be of another steep increase in labor costs?
With the prospect of the total compensation provision of the City’s minimum wage ordinance expiring in 2025, we polled our Seattle members in 2024 to understand how restaurant operators would adapt to a $2.72 per hour mandated wage increase for their tipped employees – the largest and fastest mandated wage increase in state history.
Seattle restaurants answered:
%
82% will increase menu prices
%
74% will reduce staff hours
%
47% will cut days/hours of service
How Restaurants Are Doing
A majority of respondents were impacted by declining sales in 2024 and 2025.
2024 Sales Data
Roughly 89% of respondents’ first two months of 2025 were down or flat.
Half of respondents lost money in 2024. More than one-fifth lost greater than 15%.
Sales declined in 2024
56% said sales declined by more than 5%.
How Restaurants Have Adjusted
The vast majority of respondents made the following changes in the last 6 months.
Last 6 Months
Raised prices
89%
Reduced staffing hours
76%
Laid off employees
44%
Reduced operating hours
42%
6 Month Outlook
In the next six months, if these trends continue, operators state that:
71% will raise prices
47% will reduce staffing hours
Top Concerns
Out of a list of 10 priority issues, labor costs rank as the top concern among respondents—and is the only issue policymakers can affect.
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- Labor costs
- Inflation
- Food/pour costs
- Lower guest count
- Lower guest spending
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Business Models
The respondents represent the following categories:
63% Full service restaurants
24% Counter service
5% Bars
3% Nightclubs
5% Other (taprooms, etc.)
*60 total respondents
Regardless of service model, all Seattle restaurants are experiencing significant challenges
Full service
restaurants
2023 sales vs. 2024
Counter service
restaurants
2023 sales vs. 2024
Already feeling the pressure
The operating margin for restaurants in Washington is 60% lower than the national average.
Wage mandates are the biggest pressure
Compared to other states, the cost of labor is uniquely high in Washington – and is uniquely high in Seattle compared to the rest of the state.
Did restaurants use the ‘total compensation credit’ (tip credit) for employees in 2024?
%