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- Inflation is a top concern for restaurant operators, and they're passing higher costs to diners.Prices of staples like coffee and burgers continue to rise, according to data from the financial company Toast.Nearly half of restaurants plan to raise menu prices further if inflation woes 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 the restaurant management software company Toast, nearly half of restaurant operators said they plan to increase menu prices if inflation, tariffs, and labor costs continue to climb.
The National Restaurant Association estimates that to maintain a modest 5% profit margin, the average restaurant would need to raise prices by 30.3% — a move many owners fear would scare customers away.
That's bad news for diners, who're already facing increased costs for favorites including burgers, burritos, and coffee. Toast's menu price monitor, released in August, found orders of wings and pints of beer were the only tracked items that beat the nation's current 2.9% rate of inflation, increasing 2.3% and 2.4%, respectively.
Business Insider reported in September that grocery prices have sharply increased in recent months, reaching their highest level since August 2022, and inflation now exceeds the Federal Reserve's 2% target.
The price hikes are tied to President Donald Trump's aggressive tariff strategy, which a Yale economist told Business Insider in April is expected to cost the average consumer about $3,800 this year — and that was before Trump renewed trade tensions with China on Friday, announcing a new round of tariffs on the country's imports.
Although the tariffs on imports from China primarily affect items such as electronics and apparel, they also encompass a wide range of fish, snack foods, and spices.
"While tariffs can be enacted with a pen stroke, it takes 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 general theme of higher consumer prices."
For the restaurant industry, which already operates on thin margins, the higher cost of ingredients is not just an inconvenience — it's approaching a crisis point. Not only are their own food and labor costs higher, but consumers are also pulling back on spending, dining out less, and seeking promotional deals when they do.
National Restaurant Association President & CEO Michelle Korsmo said in an August statement that operators are reluctant to raise prices because it makes consumers even less likely to dine out, further jeopardizing the industry, but they "may have no choice" given their increasing costs.
So go ahead and savor your $14 burger — it might be the cheapest one you'll see for a while — or opt for wings and a beer, as the last bargains left on the menu.
