New research shows how restaurants are balancing innovation, growth and risk

Inside the crowded restaurant industry, a quiet erosion is happening behind the scenes. For some, market opportunities are drying up, and their competitive edge is at stake. The reason? A misaligned balance between risk and innovation. 

Now that diners have more choices than ever, the stakes for not reconciling the two are especially high — 37% of restaurants that neglect to balance risk management lose their customers to more innovative competitors.  

To understand how restaurants are responding to this challenge, Mastercard commissioned Forrester Consulting to study innovation, risk management and AI adoption across multiple industries for the 2025 study, “The experimentation advantage: Research on de‑risking innovation.”

This article, based on findings from the survey conducted for the study, explains why restaurants struggle with risk management and how structured experimentation — powered by advanced AI and analytics — can help them scale groundbreaking initiatives with confidence.

• 56% of surveyed restaurant leaders say that growing competition or market disruption is a top business concern and barrier to rapid innovation: Without a proactive culture of experimentation, increasing competition can force companies into a reactive stance that stifles innovation. 
• 86% cite balancing risk and innovation as a challenge: This tension can cost restaurants their competitive edge and drive consumers to frequent more innovative competitors. 
• 83% agree that small-scale testing helps them innovate with less risk: Experimentation and analytics give restaurants a safer way to measure real-world performance and scale what works.

Fifty-six percent of surveyed restaurant leaders say competition or market disruption is their top barrier to innovation. It’s no secret that market pressure can force companies into a risk-averse stance that stifles innovation. But rolling out a new initiative is not inherently perilous; while adoption can temporarily disrupt operations, staffing, margins and the customer experience, small scale testing helps ensure bold ideas also lead to impactful results that offset these challenges.  

The deeper problem then centers around experimentation. Seven in 10 restaurant leaders say refining new concepts before scaling is a challenge, a higher rate than seen in other industries like retail and financial services. 

The impact is two-fold: As competition and market volatility collide, organizations may focus on playing it safe, and a lack of experimentation infrastructure further entrenches this strategy.

Even when competition is fierce, internal alignment often ultimately determines whether innovation moves forward. While 72% of restaurant leaders say stakeholder alignment is critical or important to innovation success, more than half (53%) say it’s difficult to achieve. 

Tying initiatives to outcomes is crucial to achieving stakeholder alignment — yet two-thirds of restaurant leaders (67%) say measuring ROI is their top challenge when acting on innovation priorities. 

When teams can’t show impact, they struggle to secure buy‑in for further expansion of their initiatives, even when they show early promise. Clear evidence gives senior leadership the confidence to keep innovation moving across the organization.

Before scaling innovation, teams must align on acceptable risk — and how they will measure success. Smart risk management and an AI-enabled approach to measurement and analyses help brands do just that.

Yet this is where many innovation efforts stall, as 86% of restaurant leaders report difficulty striking the right balance between risk and innovation.

That imbalance has consequences: 51% say misalignment between risk management and innovation costs them their competitive edge, and 37% say it contributes to customer churn.

AI brings this tension into sharper focus. While there are practical ways to introduce AI incrementally while reducing risk, 42% of restaurant leaders report it plays only a limited role in their strategy, often due to uncertainty around future outcomes.

Restaurant leaders that sit on their hands risk falling further behind. AI is already seeing widescale adoption in the restaurant industry across a wide range of use cases, including:

• Demand forecasting  
• Personalized offers 
• Labor planning 
• Menu optimization 
• Inventory management  

Each use case carries different operational, financial and customer-experience risks, which makes small-scale testing of AI initiatives especially important before broader rollout.

Findings from the survey point to a clear path: Business experimentation on a small scale can reduce risk and fast-track promising ideas, bridging the innovation gap.

The research shows:

• Experimentation leads to confidence: 83% of surveyed restaurant leaders say small-scale testing provides the insights needed to move forward.
• Actioning insights enables innovation at scale: 72% of leaders across all industries surveyed in the study see large or transformational gains when they turn insights into action.
• Stronger analytics amplifies impact: 44% of restaurant leaders say advanced data and analytics capabilities help increase revenue from existing offerings, enabling faster innovation without increasing risk. 

Advanced analytics, in particular, can help teams evaluate whether a new initiative is improving revenue, margins, customer frequency, average ticket size or operational efficiency. By piloting new concepts at test locations and comparing them against similar control locations, teams can better understand whether results are caused by the initiative itself or by outside market factors. Leaders can then refine their approach and make faster, more confident decisions.

Pricing isn’t a zero-sum game — adjustments can have unintended consequences on a large scale, and not all shifts result in increased margins overall. Experimentation allows restaurant leaders to isolate the true incremental impact of these changes through controlled environments.  

Consider a restaurant chain that wants to understand how different regions and customer segments respond to pricing adjustments. Instead of changing prices everywhere at once, the chain tests new pricing in a subset of locations and compares results against matched control locations. Companies can then see where pricing drives volume, slows demand, spurs upsells and more.  

For instance, adjusted pricing may lift margins in one region but reduce sales of entry-level items. In another, it may encourage customers to trade up to premium menu offerings. With clear evidence of real-world performance, the restaurant can refine its pricing strategy most effectively.

In today’s fast-moving environment, restaurants are under pressure to innovate. Without a repeatable way to test and measure in-market, even their strongest ideas will stall — or scale with avoidable downside.

Experimentation brings real-world validation into that process, helping teams test initiatives early and act with confidence based on evidence rather than intuition.

To explore the full findings, download The experimentation advantage: Research on de‑risking innovation, featuring insights from global senior leaders on how structured experimentation and data‑driven best practices help organizations accelerate innovation and AI adoption.

Restaurant leaders report that almost half of their ideas don’t break even or prove their initial hypotheses. Ready to uncover which innovative ideas have the potential to perform at scale? Explore how Mastercard Test & Learn™ can turn every initiative into shared learning that builds confidence and sharpens organizational decision-making.