National Restaurant Association CEO: ‘Cautious Optimism’ for Growth in 2026

Why It Matters

Operators and investors must navigate rising input costs and a tightening labor market, making efficiency and policy changes critical to restoring profitability in 2026.

Key Takeaways

• 2025 sales grew only 1% after inflation.
• 42% of restaurants lost money in 2025.
• Food costs up 38% since 2019.
• Labor costs rose 35% over same period.
• Tech and efficiency key to 2026 recovery.

Pulse Analysis

The restaurant sector entered 2025 with a near‑flat top line, as inflation‑adjusted sales barely nudged upward. This stagnation reflects a confluence of pressures: commodity prices have surged nearly 40% since 2019, while wages have climbed over a third, eroding margins for both quick‑service and full‑service operators. As a result, more than four in ten establishments reported losses, a stark rise from the previous year. Understanding these cost dynamics is essential for any stakeholder evaluating the industry’s health.

Looking ahead, the association’s leadership emphasizes that technology and operational discipline can offset some of the headwinds. Automation in ordering, kitchen management, and labor scheduling can reduce waste and improve employee satisfaction, which in turn lowers turnover—a chronic issue amplified by the current talent shortage. Moreover, the off‑premise segment, once a growth engine during the pandemic, appears to be stabilizing, prompting restaurateurs to refocus on in‑house experiences and hybrid service models that blend dine‑in with efficient takeout.

Policy will also play a pivotal role. Korsmo’s legislative agenda targets immigration reform to broaden the labor pool, the Credit Card Competition Act to lower transaction fees, and the US‑Mexico‑Canada trade agreement to ease supply‑chain constraints. Together, these measures aim to soften cost pressures and create a more favorable operating environment. For investors and executives, aligning strategy with these macro trends—cost control, tech adoption, and supportive regulation—will be the linchpin for achieving sustainable growth in 2026.