Full-Service Restaurants NAICS 722511

Mar 14, 2026 - FSRs at Risk

• About 9% of US full‑service restaurants are at risk of closing this year, with the highest concentrations of vulnerable units in the South and Midwest, according to Black Box Intelligence (BBI). The data-and-insight firm classified restaurants as “at risk” if in 2025 they lost more than 30% of their highest annual sales level recorded since 2019. A further 3% of units lost over 50% of sales, making their closure almost certain. With cumulative inflation up one‑third since 2019, it’s nearly impossible for underperforming FSRs to recover once sales fall that far, says BBI. To survive, proactive portfolio pruning is essential as closing bottom‑tier units can strengthen the system by reallocating capital and traffic to stronger locations. Operators should benchmark performance against local competitors to distinguish execution issues from market saturation. Nearby restaurants can capture displaced demand, but only if they offer strong value, consistent execution, and stable staffing.
• 2026 will be a year of modest growth but continued margin pressure for restaurants, with total restaurant and foodservice sales projected to reach $1.55 trillion and jobs added to total more than 100,000, according to the National Restaurant Association’s 2026 State of the Restaurant Industry report published in February. Cost pressures will remain a top challenge with more than 9 in 10 operators citing persistent food, labor, insurance, energy, and swipe fees as major constraints on margins. Consumer demand is forecast to be solid but constrained, especially among lower‑ and middle‑income households, with Gen Z and millennials continuing to drive off‑premises growth, although with overall limited spending power. Hiring will remain difficult, especially recruiting experienced managers and chefs. To manage labor gaps and control costs, technology adoption, including AI ordering, digital payments, loyalty, automation, and analytics, will be essential.

• The three dominant themes forecast to shape US menus in 2026 are comfort, global flavors, and value, according to the National Restaurant Association’s 2026 What’s Hot Culinary Forecast published in late 2025. Based on surveys of hundreds of culinary professionals polled in October, the report shows consumers gravitating toward nostalgic, familiar foods, like smashed burgers, and global influences such as Caribbean curry bowls. Diners are also seeking flavor escapism and blending comfort with adventurous tastes. Not surprisingly, affordability and wellness remain central, driving interest in value menu options, protein‑packed meals, and low‑alcohol beverages. These trends reflect a broader desire for satisfying, approachable dishes that still feel fresh and globally inspired. For operators, the forecast signals strong demand for menu items that balance comfort, creativity, and cost‑consciousness heading into the new year. Allergen-friendly menus, ingredient transparency, and compostable/reusable packaging are other trends for 2026, per NRA.
• Producer prices for all foods rose 1.3% in November compared to a year ago, after jumping 7.3% in the previous November-versus-November annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by full-service eateries rose 1.6% year over year in November, while the average industry wage rose 5.1% over the same period to $21.44 per hour, easing a bit from its record high in October, BLS data show. Tariffs on imported ingredients and other inputs, along with food and labor cost inflation are driving up menu prices and squeezing restaurant margins.