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Inflation is one of the top concerns of restaurant operators, and they pass higher costs on to guests.
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The prices of basic products such as coffee and hamburgers continue to rise, according to data from the financial company Toast.
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Nearly half of restaurants plan to further increase menu prices if inflation concerns persist, Toast found.
If you think your burger, burrito or cold brew already costs too much, brace yourself: Restaurant groups say they would have to raise prices by 30% just to stay profitable amid rising costs.
In a new survey from restaurant management software company Toast, nearly half of restaurant operators say they plan to increase menu prices if inflation, tariffs and labor costs continue to rise.
The National Restaurant Association estimates that the average restaurant would have to increase prices by 30.3% to maintain a modest 5% profit margin. Many owners fear this will deter customers.
That's bad news for diners, who are already facing higher costs for favorites like burgers, burritos and coffee. Toast's menu price monitor, published in August, found that orders of wings and pints of beer were the only tracked items to exceed the country's current inflation rate of 2.9%, up 2.3% and 2.4% respectively.
Business Insider reported in September that grocery prices have risen sharply in recent months, reaching the highest level since August 2022, and that inflation is now exceeding the Federal Reserve's 2% target.
The price increases are tied to President Donald Trump's aggressive tariff strategy, which a Yale economist told Business Insider in April will cost the average consumer about $3,800 this year — and that was before Trump renewed trade tensions with China on Friday and announced a new round of tariffs on the country's imports.
While the tariffs on imports from China mainly affect items such as electronics and clothing, they also include a wide range of fish, snacks and spices.
“While tariffs can be implemented with the stroke of a pen, it will take years to rewire global supply chains,” John Lash, group vice president of product strategy at connected supply chain platform e2open, told Business Insider in May. “How this all plays out will be a complex formula full of surprises, with the overall theme being higher consumer prices.”
For the restaurant industry, which already operates on thin margins, higher ingredient costs aren't just an inconvenience; they are approaching a crisis point. Not only are their own food and labor costs higher, but consumers are also pulling back on spending, eating out less and seeking promotional offers when they do.
