Puerto Rico restaurants see drop in profit margins, sales

Trade group-commissioned report details challenges from rising costs, labor shortages and reduced investment plans.
Puerto Rico’s restaurant industry has seen shrinking profit margins and declining sales, according to the Puerto Rico Restaurant Association’s (ASORE, in Spanish) latest “Restaurant Industry Projections 2025” report.
The study reveals that the percentage of restaurants with profit margins below 8% rose to 43% in 2024, up from 37% in 2022. Sales performance also declined, with 48.2% of establishments reporting increased sales in 2024, compared to 55.8% in 2023, while those experiencing decreased sales rose from 32.4% to 43.8%.
These figures reflect the tough conditions Puerto Rican restaurants face, including higher operating costs and economic uncertainty.
“The findings of this report show us how these policies are disproportionately affecting restaurants, which already lead bankruptcies in the island’s commercial sector,” said ASORE President Carlos Budet, who urged lawmakers to consider measures that support the industry and allow restaurants to thrive amid difficult conditions.
“Although profit margins have declined, there is still room for growth, but we need a legislative environment that encourages growth, not hinders it,” he said.
The report, prepared by economists Chantal Benet and Gustavo Vélez of Inteligencia Económica, also found a reduced investment outlook for 2025. Only 46.5% of restaurateurs plan to expand, down from 51.5% the year before.
Labor shortages remain a significant issue, with 77.7% of surveyed establishments reporting a combined 2,618 unfilled positions. Non-tipped employees earn a median hourly wage of $11 and work an average of 30 hours per week.
The report identifies rising food and energy costs, increasing minimum wages, and recruitment difficulties as the most pressing challenges for the industry. Although the average restaurant ticket price of $32.70 (median $18) offers some revenue stability, operational costs — especially for electricity and labor — continue to erode profits.
Additionally, fewer restaurants raised prices in 2024 (62%, down from 76% in 2023), with more businesses opting for price reductions to stay competitive.
Despite the challenges, the report emphasizes that restaurants remain a viable business opportunity with proper management, education and strategy implementation.
“Since the beginning of this project, our goal has been to provide reliable and relevant data that serves as a strategic guide for the sector,” said Vélez.
“These results reflect the complexity of the economic environment and show that restaurants can be successful and sustainable businesses with the right tools and strategies. The key is education, ongoing training, and the implementation of best practices that strengthen operations,” he said.