Rising Restaurant Costs Outpacing Inflation, Industry Analysis Finds

Driven by higher labor and food costs, total expenses for running a restaurant have jumped by 36% since 2019, according to the National Restaurant Association.

That increase is 3% higher than the overall 33% inflation since January 2019, signaling that restaurants are facing higher cost pressures than other industries.

Based on data from the U.S. Bureau of Labor Statistics and the National Restaurant Association’s surveys of operators, restaurant expenses have risen sharply across all major categories over the past seven years, with the largest increases in food and labor. Average hourly earnings of restaurant employees jumped 41% from pre-pandemic levels, while average wholesale food prices were up 35%.

To counteract those cost increases, restaurants have had to raise menu prices. Average menu prices increased 36% between February 2020 and May 2026, according to data from the Bureau of Labor Statistics. These price increases have allowed the typical restaurant to maintain the 5% profit margin it had before the pandemic.

Additionally, the National Restaurant Association noted that restaurant sales growth has moderated since the post-pandemic peak in 2021 and 2022. With costs still rising, this more tempered growth is putting even more pressure on operators to maintain their profit margins. As a result, operators are even more focused on improving efficiency and productivity across their operations while also identifying opportunities to manage costs.

The full analysis is available here.