Restaurant Prices Rising 71% in 2026
71% of restaurants plan to raise menu prices this year, up from 57% last year, as economic uncertainty and inflation squeeze margins. Consumer spending on restaurants has dropped to $90 per week from $115 in June 2025, while the industry increases adoption of AI-powered hospitality features and digital ordering systems.
- To cope with rising costs, 31% of restaurant operators are considering variable pricing, which means charging different prices based on the time of day or day of the week, up from 22% last year. Other strategies include reducing portion sizes and adding more affordable menu options. - Labor costs continue to be a significant pressure, with minimum wage increases taking effect in 19 states on January 1, 2026. Since the pandemic, overall labor costs for restaurants have increased by 35%. - Wholesale beef prices are forecasted by the USDA to increase by 6.9% in 2026 after rising 13.9% in 2025; consumer prices for beef and veal are expected to climb 9.4% in 2026. This is largely due to tight cattle supplies, with farm-level cattle prices in late 2025 being 23.9% higher than the previous year. - In response to higher prices, 68% of U.S. consumers report cutting back on restaurant dining. Among those cutting back, 81% are eating out less frequently, while 36% are choosing less expensive restaurants. - The gap between the cost of eating out versus at home continues to widen, influencing consumer choices. In January 2026, the price for food away from home rose 4% year-over-year, while the overall inflation rate was 2.4%. - Restaurants are increasingly turning to AI to improve efficiency and sales. Case studies show that AI-powered ordering systems can increase online orders by up to 60% and overall sales by 30%. AI-driven upselling has been shown to increase the average order value by 10-15%. - While total restaurant sales are projected to reach a record $1.55 trillion in 2026, this figure is largely driven by menu price inflation. After adjusting for inflation, the industry's real growth is expected to be a modest 1.3%.
