The nation’s restaurant industry “is poised for a year of measured growth,” the National Restaurant Association said in a new report.
This is despite “a cooling labor market, persistent cost pressures, and cautious household spending” that will “continue to challenge operator margins,” according to the association.
Total restaurant and foodservice sales are projected to reach $1.55 trillion and restaurant operators are forecast to add more than 100,000 jobs, the report states.
The industry is “navigating a mixed economic landscape: operators are facing uneven traffic and elevated operating expenses, while consumers – particularly those in lower- and middle-income households – are increasingly stretched,” the report states.
Scott Dolch, president & CEO of the Connecticut Restaurant Association, sad “his national report confirms what we are seeing and feeling here in Connecticut, which is that while top-line sales projections remain high, local operators are grappling with a significant foot traffic gap and other challenges.”
“It’s important to remember that 97% of Connecticut’s full-service restaurants are independently owned, and these small businesses are being squeezed right now as rising costs stretch household budgets and keep more potential customers at home.” Dolch said.
“In response, businesses are increasingly turning to new technology to find efficiencies, which will hopefully help them stay in business,” he said. “Restaurant owners are resilient and hardworking, but they need state leaders to cultivate an environment where small businesses can grow and thrive.”
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The report notes that, with all the hurdles, “restaurants remain deeply woven into American culture,” with adults continuing to prioritize dining out, takeout, and delivery, even with tightened budgets.
“Restaurants remain an economic powerhouse that, even when faced with soft consumer spending and sustained margin pressures, drives job growth and fosters entrepreneurship,” Michelle Korsmo, president & CEO of the National Restaurant Association said in a statement. “The industry’s resilience is driven by its people, its adaptability, and its ability to evolve alongside consumers, making continued investment in workforce, innovation, and smart policy solutions essential to long-term growth.”
Key findings from this year’s report include:
Projected modest growth with continued pressures.
Operators remain cautiously optimistic, even as rising costs and softer traffic persist.
Many operators expect sales to hold steady or improve this year, and the association forecasts modest real sales growth of 1.3 percent.
Consumer demand is their, but their spending power is restrained.
Consumers have “strong pent-up demand for restaurant experiences,” and more than seven in 10 consumers say they would use restaurants more frequently if they had more disposable income.
Gen Z and millennials continue to lead the industry’s off-premises growth.
The industry workforce will continue to grow, though it will be challenging to fill the open positions, the report states.
Nearly three quarters of operators plan to hire but expect difficulties finding experienced managers and chefs.
Longer term labor force challenges will be found, particularly the shrinking 16-to 24-year-old population, according to the report. The situation underscores the need for sustained workforce development and immigration reform, it notes.
Rising costs remain the industry’s key stressor and is limiting operator margins. “More than 9 in 10 operators cite food, labor, insurance, energy, and swipe fees as significant challenges,” the report states.
“Last year, 42 percent of operators reported their restaurant was not profitable – highlighting the need for operational innovation, workforce investment, and smart policy solutions,” according to the report.
The report states that workforce development and technology could help release some of the margin pressure.
“In the current economic environment, restaurant operators are investing in training and tools to support hospitality with technology-driven efficiency. Advances in ordering, AI, and data analytics are helping operators streamline operations, manage costs, and enhance the customer experience,” the report states.
The report predicts the uncertainty of 2025 will persist in 2026, requiring operators to rely on their creativity and adaptability.
“Success for operators this year will hinge on their ability to get the math right in a still‑challenging economic environment,” Chad Moutray, chief economist for the National Restaurant Association said, in a statement. “After a year when 60 percent of operators reported softer customer traffic, there is cautious optimism for improvement. At the same time, operators remain laser‑focused on controlling costs while delivering value and providing satisfying menu innovation that resonates with consumers.”
The 2026 State of the Restaurant Industry Report is the association’s annual analysis of the industry’s size, sales, workforce, technology, menu trends, and consumer and operator sentiment.
