Key Tailwinds for the Restaurant Industry in 2026
Factors such as lower gas prices, tax cuts, and the FIFA World Cup could provide a much-needed boost. During a recent interview at the annual ICR Conference in Orlando, William Blair analyst Sharon Zackfia said that although the industry saw some improvement in December compared to a curveball-filled 2025, most outlooks remain conservative. “This is good. As an analyst, you don’t want to see a lot of Pollyannas. (You want to see) prudent outlooks,” she said. “Hopefully things will get better, but there is still some uncertainty.” Prudent is, indeed, good, and no doubt this environment is still tough. One operator recently told me that it hasn’t been this challenging for the industry since the Great Recession in 2008-09, inclusive of the 2020 COVID year. That’s because during COVID, everyone was going through the same thing, consumers were more forgiving of operators trying to stay afloat, they were also seeking comfort through restaurants, and it was a definitive crisis. Now, the industry and its consumers are increasingly bifurcated and selective, there’s very little room for forgiveness if an experience isn’t up to par, and there seem to be mini crises or threats of crises regularly. “The best I can expect is that maybe this year is more apples to apples — just getting used to the noise. It may not get quieter, but at least it will be comparable,” Zackfia said. “Maybe we don’t have a worse news flow than we had in 2025.” Super Bowl Sunday, Valentine’s Day, and March Madness always generate sales and traffic lifts for the industry, especially full-service concepts. This year, we can also bank on the significant potential of the FIFA World Cup, in which the United States is a host country in June and July. The FIFA World Cup is largely considered the biggest sporting event in the world, and the organization expects a record 6.5 million total attendees across 104 matches in Canada, Mexico, and the United States. That’s not counting the billions more who plan on watching the event remotely. In 2022, the World Cup reached 5 billion fans. n 2026, there will be several tax relief measures introduced as part of President Trump’s “One Big Beautiful Bill,” signed into law last year. These measures are expected to reduce taxable income among most middle-income earners, families, and seniors, which could bolster spending among lower-and-middle-income consumers who have pulled back from restaurants the most throughout the past year-plus. Bloomberg Intelligence expects these tax-law changes, as well as more anticipated Federal Reserve interest-rate cuts, to benefit quick-service chains such as McDonald’s and Taco Bell…
Preparing Kitchens for Peak Season Performance
How operators can and should prepare for busy times at their restaurant. Winter often puts restaurant operations under a microscope. Peak-season volumes, fluctuating demand, and sustained pressure on teams reveal where processes hold up and where cracks start to show. Catering requests rise, private dining rooms fill up, and the pace inside every kitchen quickens as operators manage some of the most demanding periods on the calendar. For guests, winter dining is about connection and comfort. For operators, it’s a critical moment to assess what worked during peak season and what needs to improve heading into the rest of the year. Capturing that insight requires careful planning, steady leadership, the right back-of-house tools, and a team that can perform under pressure. Consistency is what turns peak-season stress into long-term performance. It protects margins, safeguards the guest experience, and creates operational momentum that carries forward well beyond winter. And it starts long before the next surge in reservations arrives. Peak volume has a way of amplifying every pressure point in a restaurant. Higher demand pushes teams to move faster while guest expectations remain high. Many operators are also managing multiple service formats at the same time — balancing a full dining room alongside private events or group bookings. Those moments can drive strong sales, but they can also strain a kitchen that is already operating at capacity. The real challenge is maintaining flow. When one table falls behind, the effects ripple outward. Timing slips, coordination breaks down, and pressure builds quickly, especially when a large event order hits the pass during a peak service window. Winter volume also brings another operational reality into sharper focus: burnout. Team members are often asked to take on longer and additional shifts, or support catering and prep work between services. Fatigue becomes a risk just as consistency becomes most critical. Without balance and recognition, exhaustion can lead to mistakes, inefficiency, and missed opportunities. 4 ways to ensure consistency during the peak season…
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How the K-Shaped Economy Is Reshaping Consumer Spending
One in which the wealthiest Americans drive growth in consumer spending. s we move into 2026, we expect the K-shaped economy to continue as AI adoption generates a reduction in demand for labor, faster than the economy can create new jobs. Named for the split recovery Americans experienced coming out of Covid, the K-shaped economy is one in which the wealthiest Americans drive growth in consumer spending, while everyone else suffers under rising inflation, slower wage growth, and higher unemployment. Well-off Americans with real estate and investment portfolios continued to prosper in 2025 as rising home prices and financial markets fueled wealth accumulation, while younger Americans – those saving to buy a home and one-day retire – saw these goals slip further from reach. The result is a bifurcation of the market, with one set of consumers focused on luxury and the other stretching every dollar. In this environment, small businesses are struggling to identify their core customer and position their offerings appropriately. While they adapt to the changing world of technology, restaurant owners are also working to position themselves in the emerging economy. The restaurant industry experienced top-line growth in 2025, despite rising unemployment as the high-end of the market was supported by robust consumer spending from high income households, and quick service restaurants maintained a steady clientele of lower wage earners seeking value. However, most restaurants saw expenses rise faster than they could pass on costs to customers, creating margin compression. A high-end restaurant today can expect to earn between five- and ten-percent profit margins, with ~35 percent of revenue going to cover labor expenses. We expect labor costs to continue to rise in 2026, as the crackdown on undocumented immigration weighs on the industry, further reducing margins for restaurants who are trying to keep menu prices as affordable as possible. We expect the current tax and tariff structure to largely remain in place, and we expect continued economic stimulus in the form of wide budget deficits. As a result, we see the economy growing in 2026, driven by efficiency gains, technology investment, and economic stimulus, but expect growth in consumer spending to be subdued as unemployment rises. Given this dichotomy, small businesses face a difficult balancing act of serving a bifurcated customer base while investing in new technologies and navigating a turbulent economy…
Why Martinis are Enjoying a Full-Scale Revival
Operators are pairing renewed respect for tradition with showier, experience-driven service. Wet or dry, dirty, or clean, the martini has long stood as the pinnacle of mixed drinks. After years of bar trends cycling through one classic after another, the spotlight has finally swung back to the martini. The result is a full-scale revival. This resurgence looks different from the “neo-tini” wave of the 1990s and early 2000s, when almost any drink could be given the suffix as long as it arrived in a V-shaped glass. Drinks like the Lemon Drop and Cosmopolitan dominated sprawling “martini menus,” many of which didn’t feature a classic build at all. That approach continued into the early aughts, until the craft cocktail movement reintroduced bartenders to the fundamentals. A new generation of gins, better vermouths, higher-quality bitters, and a fresh appreciation for elegant glassware set the stage for the martini’s return to form, pushing the category back toward technique, balance, and tradition. Today, operators are digging into the drink’s history while layering in modern touches, yielding menus that honor the original template without being confined by it. “I think there’s a resurgence of vodka-based and the gin-based martinis as a whole, with plays on different garnishes and different presentations,” says Shaun Henesy, director of food and beverage at Sofitel New York, the U.S. flagship of Paris-based Sofitel Hotels & Resorts. “There’s an elegance and refinement to that type of cocktail. It’s really beautiful, simple, and boozy in its traditional aspect.” Henesy notes that well-executed classics are easier to find than ever, but the martini also serves as a strong canvas for stories, concepts, and creative flourishes. That philosophy helped shape the beverage program at Social 45, Sofitel New York’s new bar and bistro that opened last fall. Henesy says his team set out to blend the energy of New York City with the sophistication of Paris, a theme that carries through decor and the menu, including the signature Sofitel N5 Martini made with gin, a vermouth house blend, champagne cordial, and a homemade N5 perfume spray…
The Hidden Restaurant Staffing Crisis
Staffing is reported to be a continual struggle for operators. How would you define the “hidden burnout” crisis in hospitality and how is it different from the everyday stress that is common in the industry? Servant leadership and all jobs in hospitality inherently require that we put the needs of others above our own. This is what those of us who work in this industry love doing. It creates warm, wonderful, intrinsic benefits. And, yet, it means that when we put ourselves last, day in and day out, we can lose sight of what we, the individual, need. For most workers, the “daily stress” of the job isn’t actually viewed as stressful. What is distressing (the negative version of stress, in my view) is when compounding negative factors batter workers, managers, and chefs relentlessly — margin erosion, societal strive rolling through the front doors and spilling onto the table and the server, legislation or ideology that pits worker vs. manager (even though most of the time, in my experience in both roles, that relationship is actually positive), staffing levels amidst decades of ineffective immigration policy. The distress can push a hospitality person to reach the point where it just isn’t worth it anymore. Why is this issue important to you? I love my teammates, and I love the camaraderie inside and outside our restaurants with our colleagues at other places. We are a deeply human industry. It isn’t actually ever food or drink that touches a diner’s heart — it is the work of the humans who produced and presented that food or drink that has touched that diner’s heart. One reason some restaurants make magic is that they keep their teams together; low turnover, fully-staffed, fully-trained, fully-performing — this recipe allows for the team to gel, and the magic to be made. So the issue of caring for our people is paramount; we must care for each other and ourselves so we can care for others, for the long term. Is this crisis worsening and what can be done to combat it? I’m not sure it is worsening; I think it depends on the restaurant and the city it is in. As with many topics, we can improve by replacing ideology with logic. When people with influence and power actually choose to listen, distill, collaborate, and look for common ground, rather than closing their ears tightly and opening their mouths widely. With a logical, centrist approach to issues outside the restaurant, we can reduce some of the distress inside. We can have policies that help employees and companies with things like child care and health insurance, and we can do this without demonizing businesses or demonizing workers who need support…
5 Mindset Shifts Every Restaurant Owner Must Make
Only a few restaurant owners experience real freedom because most never change the way they think. The hardest person to lead in your restaurant is you. Most restaurant owners think they’re stuck because of their team. I can tell you right now, it’s not your team that’s holding you back. It’s your thinking. The restaurant you have today is a direct reflection of the mindset you bring into it every single day. Here are five mindset shifts every independent restaurant owner must make to create freedom, consistency, and control. Mindset shift No. 1: Stop working in the restaurant and start leading it. Being hands-on isn’t the only way to get things done right. That mindset traps you in the kitchen, behind the bar or buried in paperwork until you burn out. Leadership isn’t about doing every job. It’s about creating people who can. Your leverage is systems, training, and accountability. When you lead through those, your team executes your vision without you standing over their shoulder. I didn’t always understand that. Early on, I thought leadership meant working harder than everyone else. I remember managing a store with no idea how many employees I truly needed. When I felt short-staffed, I over hired. When I thought we were fine, we got slammed. Every time, it bit me. I was managing chaos instead of leading people. Once I learned to plan and hold my team accountable, I stopped being the firefighter and started being the leader. Leadership isn’t about effort. It’s about clarity and accountability. Mindset shift No. 2: Stop chasing perfection and start building consistency. Perfection is an illusion that keeps you from making real progress. You don’t need a flawless restaurant. You need a consistent one. Consistency builds trust with your team, your guests, and your bank account—and it comes from systems, not superstars. Fear often blocks consistency. One of the biggest fears I see is changing the menu. Your menu is the heart of your business, and your menu mix is often screaming, “These items aren’t profitable.” Then fear creeps in: What if customers get upset? What if sales drop? What if I make the wrong move? Here’s the truth: if you’re driven by fear instead of data, you’re managing emotion, not business. Consistency wins every time. It’s built on courage, not comfort. Mindset shift No. 3: Stop managing tasks and start coaching people…
What Restaurants Need to Know About Managing Third-Party Cyber Risks
The importance of audits. It may have been the ultimate irony when a major third-party vendor to the U.S. restaurant business, Grubhub, was the victim of a cyber incident early in 2025 that originated from one of its own third-party service providers. The incident wasn’t an isolated event – it was a preview of the industry’s new reality. In September, ethical hackers found “catastrophic” vulnerabilities in Restaurant Brands Inc.’s systems affecting Burger King and Popeyes, including hard-coded passwords that could compromise operations. The pattern reveals something more troubling than individual incidents: if white hat hackers can discover these flaws in routine testing, malicious actors have almost certainly already identified and exploited similar weaknesses throughout the industry. More alarming still, the average restaurant breach goes undetected for 212 days—giving criminals months to harvest payment card data, mine loyalty program information, and extract employee records before anyone realizes the system has been compromised. Restaurants have grown increasingly vulnerable to cybercrime as digitization sweeps across the industry. About 80 percent of all their transactions are electronic. Tech solutions power everything from point-of-sale systems to kitchen order management to employee scheduling and management. Third-party delivery services run online marketplaces to help restaurants reach more customers. And vendors have their vendors, also wired, in a highly interconnected – and risk-susceptible – supply chain. In fact, third-party vendors are a big part of the cybersecurity problem overall, with data breaches involving them doubling to 30 percent of all incidents in the past year. Whether caused by vendor failings or their own vulnerability, the cost to the restaurant industry of cyber incidents is substantial. Recent reports put the damage at $3.4 million to $3.9 million for hospitality overall, thanks to factors like lost business, forensic investigations, and the price of a stolen record, which can run as high as $225. However, industry averages can mask the reality for individual operators. Consider a mid-sized franchisee operating 15 locations who experienced a breach through their third-party payroll provider. On top of the direct data breach amount, there are real additional costs for items including mandatory notification across several states, business interruption, enhanced security measures, credit monitoring for affected customers and potential legal defense…
Did You Know?
U.S. Restaurants Breathe Easier as Pasta Tariffs Are Postponed. U.S. restaurants and foodservice operators are breathing a collective sigh of relief after Washington moved to postpone and sharply scale back proposed Italian pasta tariffs, a decision that removes the threat of dramatic price increases for one of the industry’s most relied-upon staples. The change follows months of uncertainty after the US Commerce Department threatened anti-dumping duties of almost 92% on imports from 13 Italian pasta producers. Combined with an existing 15% tariff on most European Union goods, the measure would have pushed the effective tax on some pasta imports beyond 100% of their value…
Employee Tip
Top Things Restaurant Managers Should Watch in 2026. Running a restaurant has always been a juggling act — balancing guest experience, back-of-house efficiency, costs, staffing, ambiance, and now rapidly changing consumer habits and technology. As we head into 2026, there are a handful of trends, challenges, and opportunities that every restaurant manager (or owner) should have on their radar. Here’s a guided playbook built on recent reporting — with a bit of strategy and common sense tossed in. According to reporters covering Restaurant Finance & Development Conference (RFDC), the restaurant business is experiencing a “bifurcation” — meaning some restaurants are thriving, and others are struggling, depending largely on how well they adapt to shifting consumer and economic conditions…
