How the Restaurant Industry Will Fare in 2026

Why It Matters

Modest real growth and rising labor costs mean restaurants must leverage technology, marketing, and policy reforms to sustain profitability, making the sector’s performance a bellwether for consumer confidence and broader economic health.

Key Takeaways

• 2026 projected 4.8% nominal, 1.3% real sales growth
• Restaurant profitability concerns: 42% operators report losses this year
• Workforce expansion: 150k jobs added 2025, 100k expected 2026
• Tariff reforms and USMCA renegotiation crucial for menu price stability
• Marketing innovation and technology drive efficiency and consumer engagement

Summary

The podcast episode features Jonathan Mays speaking with Michelle Cororsmo, president and CEO of the National Restaurant Association, about the industry’s outlook for 2026. Cororsmo cites the association’s State of the Industry report, which projects $1.55 trillion in food‑service sales and a cautiously strong environment, with 4.8% nominal growth translating to roughly 1.3% real growth after inflation.

Key data points include a 150,000‑job increase in 2025 and an anticipated additional 100,000 jobs in 2026, underscoring the sector’s role in the U.S. labor market. However, profitability remains a concern—42% of operators reported losses in 2025, driven by menu‑price inflation, tariff uncertainty, and lingering cost pressures. The conversation also highlights the impact of pending tariff reforms and the renegotiation of the USMCA, which could stabilize food‑cost inputs and support margin recovery.

Notable remarks such as “surviving is winning” and the observation that 61% of adults view restaurants as essential illustrate the cultural importance of dining out. Real‑world examples—Burger King’s SpongeBob promotion and McDonald’s record‑breaking sock giveaway—show how creative marketing and limited‑time offers are revitalizing traffic. Additionally, upcoming tax changes that eliminate taxes on tips and overtime are expected to boost workers’ take‑home pay, potentially increasing discretionary spending at restaurants.

The implications are clear: modest growth will hinge on operational efficiencies, technology adoption, and effective marketing to drive traffic without relying solely on price hikes. Policymakers’ actions on tariffs and workforce regulations will directly affect cost structures, while investors should monitor how operators balance innovation with profitability in an increasingly saturated market.

Original Description

How will restaurants fare in 2026?

This week’s episode of the Restaurant Business podcast A Deeper Dive features Michelle Korsmo, the president and CEO of the National Restaurant Association, who talks about the trade group’s State of the Industry Report.

Korsmo discusses the industry’s annual projection of restaurant sales, profitability and trends. We talk extensively about the association’s expectations for foodservice sales this year, projected to be nearly $1.6 billion.

We discuss issues with industry profitability, and why so many operators are simply unprofitable. And we talk about immigration and other association priorities.

This is a great conversation with the head of the restaurant industry’s biggest trade group so please check it out.