Tariffs and Inflation Left Restaurants Scrambling for Solutions in 2025
How did operators respond? Price hikes, but also some creativity along the way. Next up in our State of the Industry series is inventory and menu management. There are really two sub-topics that defined 2025 and carry over into this year—tariffs and inflation. Those ever-buzzing pressures set the stage last year for restaurants to raise prices yet again. Before getting into TouchBistro’s survey, if you look at recent (November) Census Bureau data, restaurant sales gained a bit after declining in October. Rising menu prices drove much of the nominal gains, as they have for months. Yet restaurants also generated positive figures on an inflation-adjusted basis. After taking menu price inflation into account, eating and drinking place sales lifted 1.2 percent between November 2024 and November 2025. More current, though, consumer prices climbed 0.3 percent in December. Headline inflation hiked 2.7 percent, year-over-year (similar pace to November; October didn’t publish data due to the government shutdown). Food prices jumped 0.7 percent, offset somewhat by gasoline prices being down 0.5 percent. That 0.7 percent growth was the fastest since October 2022. In 2025, prices for food-away-from home average monthly growth of 0.4 percent. On a year-over-year measure, menu prices bumped 4.1 percent since December 2024, the highest-year-over-year growth figure since July 2024. All to say, menu inflation held firm last year. But it wasn’t the 8.8 percent peak observed in March 2023, which was the fastest in more than two decades. And grocery prices increased 0.5 percent in December as well. That sector averaged 0.3 percent growth per month in 2025. Broken down, menu prices at full-service restaurants upped 0.8 percent in December, with prices averaging 0.4 percent growth each month in 2025. Quick service saw a 0.6 percent uptick in December and a 0.3 percent monthly rate for the year. Year-over-year, full-service menu prices hiked 4.9 percent in December. Quick service increased 3.3 percent…
The Five Pillars of Stand Out Hospitality
Author of Stand Out Hospitality: How to Have a Business You Love -That Loves You Back. Most of you reading this know how tough the hospitality business is, particularly over the past few years with economic pressures, labor issues, and shifting customer expectations. Many probably wonder at times if it’s worth it, so how can operators reignite their spark and rediscover their clarity, confidence, and purpose? Based on her 30 years of experience building, growing, and leading pubs, cafés, fine-dining restaurants, and even festivals, Cassie Davison, founder of Kith & Kin, authored Stand Out Hospitality: How to Have a Business You Love -That Loves You Back with actionable guidance to help business owners simplify, refocus, and reconnect with what matters most. She discusses her framework: The Five Pillars of Stand Out Hospitality (Set High Standards, Stand Out, Define Your Identity, Build Belonging, and Tell a Great Story). After more than 30 years in hospitality, and over 25 years of building and running my own businesses, it felt like the right moment to pause and reflect. I’ve taken derelict buildings and turned them into multi-award-winning venues that mattered to their teams, customers and communities. But it took most of those years to truly understand why they worked. The hard knocks taught me as much as the successes. Over time, patterns emerged. I began to understand the deeper value of hospitality, why it mattered so much to customers, and why strong teams form and perform at their best. That understanding only comes from lived experience. I wrote this book because I felt a responsibility to pass that learning on. To those still in the trenches, to the next generation coming through, and to independent operators navigating an industry that is complex and demanding. Hospitality will never be easy, but it can be simpler. This book brings together decades of experience and an insider’s perspective on what allows a business to stand out and endure, even in tough times…
Bielat Santore & Company – Restaurant Industry Alert
ARCHITECTS OF THE DEAL!
Since 1978, Bielat Santore & Company principals Barry Bielat and Richard Santore have sold more restaurant and similar properties in New Jersey than any other real estate firm. If you’re unfamiliar with our services, click the link below to listen to a recent podcast and learn more about our expertise and success in the industry.
Click here to listen to podcast
We are ready and willing to serve you. Call us for a confidential consultation toady; 732.531.4200.
We invite you to visit our website, where you will find all our current listing inventory, a library of helpful industry resources and a collection of client testimonials expressing their assessments of our work and our service within the restaurant industry.
A voice for our industry. If you find these weekly bulletins informative and beneficial, we kindly ask that you write a brief Google review providing a vote of your appreciation. Simply click this link and leave a review. Thank you.
Menu Engineering Isn’t Just About the Food
It’s About the Future of Your Business. How understanding your numbers, your customers, and your layout can pull you out of the margin-growth trap. Imagine it’s Friday night. Line out the door, tickets fired; the energy is electric. You should be thrilled, but you’re staring at razor-thin margins. The kitchen is slammed, and the bank account isn’t moving. This plays out in restaurants everywhere: great sales, great stress, and no profit for growth. You’re not alone. Growth is essential for survival; it creates profit, reduces costs, and keeps teams motivated. Yet how can you grow when your menu isn’t engineered to produce the margin you need? You may be in the margin-growth trap, when fear of raising prices keeps margins too tight to grow or reward staff. Many owners “believe” they can’t price higher, and you can’t cut your way out of these weeds. Instead, you need to engineer profit back into your menu.
The Three Drivers of Menu Profitability
- Know Your Numbers: Break-Even and Real COGS – If you’re willing to work hard in your business, you should be willing to work hard on your business. True menu engineering begins with understanding your actual cost of goods, not the ideal, and helps you monitor inventory irregularities.
COGS (Food Costs) = Beginning Inventory + Purchases – Ending Inventory
Food Cost % = COGS ÷ Sales
Most owners fixate on food cost percentage as if it were the goal itself, chasing a magic number like 30%, but that’s a myth. Food cost is a diagnostic tool, not a destination. A “good” food cost depends entirely on your pricing strategy, product mix, and the value perception of your customers. The real power comes from knowing your break-even point and contribution margin per dish—that’s the kind of clarity that fuels growth.
- Understanding Contribution Margin – The contribution margin shows how much each dish actually contributes to covering your fixed costs and profit after you pay for the food that went on the plate. Food cost and contribution margin are two sides of the same coin: they tell you how much of every dollar is left after the food leaves the kitchen. It’s calculated per item or across the menu…
Restaurants Continue to Adjust for Fundamental Shift in Delivery and Takeout
Trends have settled a bit in recent years. But growth remains the target. Progressing to the omnipresent arena of off-premises, it’s a channel that proved resilient across 2025, per TouchBistro’s full-service operator survey, with 81 percent of respondents seeing increases in takeout/delivery sales. Among those reporting gains, sales jumped an average of 33 percent—consistent with 2024. Does this suggest off-premises business growth has, at last, settled after post-COVID spikes? To paint one case, Texas Roadhouse, a brand that leans on takeout and remains resistant to delivery, saw average weekly sales of $118,512 in the week ending March 3, 2020. Of that, only $9,115 came outside the four walls. By March 24, those figures were $29,432 and $25,938, respectively. Within a week, Texas Roadhouse jolted to-go sales to $41,892, a number that would rise into the high $50,000, low $60,000 range by late April. In Q2 of 2025, Texas Roadhouse posted average weekly sales of $167,350, including $22,243 from to-go sales. Its most recent quarter—Q3—was $157,325, with $21,409 in to-go sales. This feels like a two-pronged calming of the consumer waters. Restaurants have gotten better and more accessible with their takeout/delivery offerings, and are answering new habits. Also, diners are tapping the occasion understanding the parameters. That latter point typically covers price when you’re referencing delivery. Customers know what they’re paying for—and it was expensive to begin with. Olive Garden, for instance, struck a deal with Uber Eats after years of avoiding the channel. Now, it’s attracting younger, higher-income consumers paying more than dine-in guests. Delivery mixed 4 percent in Q2 (about half was incremental). Olive Garden took this route on its own terms by using Uber Direct, meaning customers order delivery off Olive Garden’s owned channels instead of third-party. The chain puts the delivery price upfront as a fee and leaves the prices of menu items just as you’d see them if you walked inside. That enables Olive Garden to gather consumer data and be transparent about what it’s charging. Yet, a larger point being, delivery is a pricy visit for customers willing to pay for the convenience. So, while they might pull back frequency as spend tightens, those who generally use the service tend to be consumers who aren’t as price sensitive as deal-seekers coming through, say, a fast-food drive-thru. The steady growth, TouchBistro said, reflects a fundamental shift in behavior…
How Smart Financing is Powering the Next Wave Expansion
Most expansion plans revolve around three uses of capital: acquiring existing units, building new ones, and funding required capital improvements. In fast-casual and casual dining, expansion today is defined by speed and access to capital. Operators that can move quickly are securing prime sites, locking up territories, and shaping competitive dynamics in categories like chicken and beverage. Those that cannot are often watching opportunities pass by. That divide is widening. Many smaller operators remain cautious, weighing inflation, labor costs, and interest rate uncertainty. At the same time, well-capitalized franchisees and private equity-backed platforms continue to push forward. The result is a market where timing matters as much as brand selection, and financing strategy increasingly determines who can act. Franchisors are amplifying that pressure. Each new unit expands footprint, drives system sales, and strengthens royalty streams. In high-demand segments, growth rights are finite. Territories can sell out quickly, particularly in concepts with strong unit economics and simple operating models. When that happens, operators are forced to make fast decisions and secure capital just as quickly. Capital Is Determining Who Gets to Expand. Most expansion plans revolve around three uses of capital: acquiring existing units, building new ones, and funding required capital improvements. In practice, serious growth strategies touch all three. The challenge is aligning financing with that reality. Structures built for a single use case often create friction once an operator tries to scale. Chicken concepts highlight the intensity. Demand remains strong, but the segment is crowded and highly competitive creating winners and losers. Rising input costs and labor pressures leave little room for error. Acquisition pricing reflects that tension. In systems with positive comps, buyers looking to enter or expand within a brand are often willing to pay up, which hardens seller expectations while in systems with negative comps often price points are lower but buyers will be responsible for significant capex requirements for remodels In this environment, underwriting discipline and deal structure can matter as much as the brand itself…
Restaurant Guests Want Customizable Options
Portion Power. It’s a win-win-win situation: consumers want customizable portions, and restaurant operators who make this change can both make money and reduce food waste. According to research from ReFED and Datassential, this has the potential to reduce 2.35 million tons of food waste annually, while saving the foodservice sector $547 million. Nearly 60 percent of Americans say they’re more likely to visit restaurants offering flexible, customizable, or innovative portion size options, and that number jumps to 75 percent for GLP-1 users. “When one in eight Americans currently use a GLP-1, I believe it makes the push for portion customization more important than ever,” Sara Burnett, Executive Director, ReFED, told Modern Restaurant Management (MRM) magazine. “In addition, our research found that Gen-Z is the most portion conscious generation, and their influence over what we eat is only growing.” GLP-1 users and Gen-Z stand out as the market segments that want portion customization the most as they are eating out more frequently, and the restaurant operators that cater to their desires will win business, said Burnett, adding that 50-60 percent of GLP-1 users and 45-47 percent of Gen-Z choose to share or skip ordering items to avoid too much food, which of course translates to a smaller check, creating an even greater incentive to offer portion customization. “It’s important to emphasize the broader opportunity since 60 percent of the general population also would prioritize restaurants that offer portion customization. I think the most surprising thing is how prominently GLP-1 users and Gen-Z stood out as being the most portion conscious, and why that’s so important in today’s world. With so much recent attention on dietary guidelines and what we eat, equally important is how much. And these market segments—with growing influence over our economy—want a say in how much they’re being served”…
Restaurants and Bars That Feel Like a Living Room
The Newest ‘Third Spaces. The same ostrich has been popping up in my Instagram feed over and over lately. It’s a taxidermied beast that holds court in what I initially thought was someone’s house in Europe. The bird I’ve been seeing in so many birthday social media stories, however, isn’t from an apartment in the Marais quarter of Paris; its residence is New York City’s Brass restaurant and Tusk Bar, which opened two years ago inside Manhattan’s Evelyn Hotel, and is designed to make you feel like you’re entering the opulent home of, say, a European art collector with great taste and, I imagine, an enviable 1stDibs wishlist. The space was designed by Islyn Studio, which says it’s “a love letter to the Parisian apartments of the 1920s.” As the studio’s founder and creative director Ashley Wilkins tells me, “We imagined it as a kind of French salon, an intimate antechamber and natural prelude to dinner at Brass. During our research, we came across the story of a Parisian apartment discovered untouched after decades, its rooms sealed in time until the passing of Madame de Florian at [age] 91.” There are plush gold settees and ottomans, and parlor palms huddled over an oval coffee table and carpeted floors. Red curtains blur the divide between the oyster bar and the restaurant, helmed by chefs Jeremiah Stone and Fabián Von Hauske Valtierra of Contra and Wildair fame. It’s the kind of environment, the Studio says, where “the air hums with an unhurried energy.” As with purse hooks and not horrible chairs, a restaurant that feels like a living room is never a requirement for me, but it’s always a plus. Something happens to me in spaces designed with this level of conviviality: when seated on one of their spacious sofas, my shoulders relax, my appetite grows, and, even if I’m dining solo, I feel less like a diner on a timer and more like a cozy person breaking bread with other cozy people…
Did You Know?
The Performance Conversation No One Wants to Have. The performance conversation is not about fixing someone. It is about clarity. I still remember the night I knew something had to change. It was a Friday, mid-rush. I walked into the kitchen of our full-service restaurant in Raleigh, and the energy felt off. Tickets were backing up. The line was disorganized. Standards we had fought hard to build were quietly slipping. My closing manager was running the shift. He had been with me since day one. With the brand since he was eighteen. Nearly twenty years of tenure. This was the person who helped me turn the location around. We had rebuilt how we led, how we trained, how we treated guests. The results showed. Financially. Operationally. Culturally. We had become the kind of restaurant people wanted to work in. But somewhere along the way, he stopped growing with us…
Employee Tip
If You Notice This at a Restaurant, It’s Time to Pay Your Bill and Leave. When you’ve struck that perfect balance between good food, on-point drinks, lively conversation, and attractive ambience, no one wants to dispel the magic by asking for the check at a restaurant. But while service industry professionals want you to thoroughly enjoy yourself every time you dine out, that doesn’t mean you should treat the restaurant like the dining room in your house. At a certain point, it’s time to go home, and if you pay just a bit of attention, you’ll notice the staff giving you lots of cues for when you should call it a night…
