Restaurant cost squeeze showing up

Restaurant bills are climbing again, and operators say the same inflation hitting diners is now squeezing kitchens from both sides. (finance.yahoo.com) In San Francisco, The San Francisco Standard reported on April 15 that a lunch salad with chicken at Wildseed in Cow Hollow cost $29.50 before tax and tip, and a salmon salad at Blue Barn in the Financial District was listed at $26.95. (sfstandard.com) Chef José Andrés told Yahoo Finance on April 14 that “restaurant closures are coming” if inflation does not ease, and said many independent operators are working long hours only to finish the year with losses. (finance.yahoo.com) Federal inflation data released April 10 showed food away from home, the category that tracks restaurant prices, rose 0.2 percent in March and 3.8 percent over the prior 12 months. Gasoline jumped 21.2 percent in March alone and was up 18.9 percent from a year earlier. (bls.gov) Grocery inflation looked calmer in March, but it did not disappear. Grocery Dive reported that prices for meat, produce and coffee were still accelerating even as the overall food-at-home index slowed to a 1.9 percent annual increase. (grocerydive.com) That split matters for restaurants because grocery shelves and restaurant supply chains draw from many of the same ingredients. The National Restaurant Association said wholesale food prices in March 2026 were still 34 percent above their February 2020 level. (restaurant.org) The industry entered 2026 with little room for error. The National Restaurant Association said in February that restaurant and foodservice sales could reach $1.55 trillion this year, but it also warned that persistent cost pressures and cautious household spending would keep margins under strain. (restaurant.org) Nation’s Restaurant News reported in March that Black Box Intelligence found 9 percent of full-service restaurants were at risk of closure in 2026 after losing at least 30 percent of their peak annual sales in 2025. Another 3 percent had lost more than half of their peak sales. (nrn.com) The same trade reporting said 42 percent of restaurants did not turn a profit in 2025, up from 29 percent in 2024, while average food costs rose 38 percent and labor costs rose 35 percent between 2019 and 2025. (nrn.com) For diners, the squeeze shows up on the menu first. For operators, Andrés said, the harder question is how long small restaurants can keep raising prices before customers stop treating lunch as a splurge and start staying home. (finance.yahoo.com)