Limited-Service Restaurants NAICS 722513

Jan 14, 2026 - Rising Minimum Wages

• Rising minimum wages in 19 states starting this month will provide a pay hike to an estimated 8.3 million workers, The Wall Street Journal reports. The increases will significantly raise labor costs for the restaurant industry, where wages make up a large share of operating expenses. Washington’s new $17.13 rate and local increases such as Los Angeles’ upcoming $30 wage for hotel and airport workers illustrate how quickly labor floors are rising in major dining markets. These increases will pressure restaurants to adjust menus, raise prices, reduce hours, or adopt more automation to offset higher payroll costs. Economists note that restaurants often have limited ability to absorb wage hikes, which can slow hiring. With more states moving toward $15-plus minimums and consumers still sensitive to price increases, restaurants face a challenging balancing act between maintaining margins and retaining staff in a tightening labor environment.
• Sales growth by pizza chains is lagging other formats, The Wall Street Journal reports. Once the second-most common US restaurant type, today pizzerias are outnumbered by coffee shops and Mexican food eateries, according to industry data cited by WSJ. Rising prices have made a $20 pizza feel less competitive against cheaper fast‑food bundles, frozen options, or home cooking, intensifying price wars among chains. Stagnation has led to bankruptcies at several regional pizza brands and strategic upheaval at major players like Pizza Hut, Papa John’s, and Papa Murphy’s, which are exploring sales, closing stores, or overhauling operations, per WSJ. Domino’s is gaining share through aggressive value deals, while dine‑in pizza formats struggle with high operating costs. To stay relevant, chains are focusing on menu upgrades, operational consistency, and brand refreshes. The trend highlights a broader industry challenge: consumers are becoming more selective, pushing restaurants to compete harder on value, quality, and variety.

• More people are opting out of group meals in favor of dining alone, according to Yum! Brands' new food trends report. The report found that solo orders have increased 52% since 2021, to make up nearly half (47%) of all dining occasions at quick service restaurants (QSR), compared to 31% in 2021. Moreover, 68% of solo diners choose not to take advantage of a deal and over half spend $10–$30 or more during a visit, suggesting diners are willing to pay more when dining alone. As a result, foods once meant for social gatherings, like pizza, are being redesigned for solo diners (personal pizzas), reflecting a shift toward food that matches individual identity and mood, per the report. Yum! Brand's research also shows that 24% of solo diners are dining out to satisfy a craving.
• A look ahead to 2026 at November’s Restaurant Finance & Development Conference forecasts the bifurcated restaurant market that emerged in 2025 will persist next year, exacerbated by ongoing economic uncertainty, Restaurant Dive reports. The most recent restaurant earnings season saw a stark divide between consumer segments that are still spending liberally, and those that have pulled back on discretionary expenditures. As consumer spending diverges, brands that deliver clear value or appeal to higher-income diners are outperforming those reliant on more price‑sensitive segments. Restaurants with weak value perception are seeing traffic decline, while chains that balance everyday value with quality are reporting stronger sales and margins. Intense competition around the $10–$12 price point means operators must sharpen pricing strategies and control costs to capture value‑oriented diners, said restaurant executives, adding that brands that stay focused on core operational excellence rather than over‑investing in tech experimentation are better positioned to retain customers.