Restaurant operators continue to juggle rising costs, less traffic

KANSAS CITY — Prices for six tracked restaurant menu items edged up in November, led by regular coffee and chicken wings, according to Toast’s Menu Price Monitor.

The Boston-based restaurant point-of-sale and management platform said the median price of regular coffee in November was $3.59, which amounted to a 0.6% increase over October and a year-over-year jump of 3.5%. Chicken wings were up 0.5% since October to a median price of $13.79, the report found, amounting to a 1.8% year-over-year rise.

Closely following those two tracked menu item increases were monthly bumps in median prices for burgers and cold brew at $14.57 (up 0.3%) and $5.54 (up 0.2%), respectively, the November report said. Cold brew posted the highest year-over-year price hike of 4.5% from November 2024, followed by a 3.5% price increase for regular coffee during that same period.

The other two tracked menu items for the Menu Price Monitor are burritos (flat since October at a median price of $13.43 but up 3% year over year) and beer (unchanged at a $6.50 median price in November 2025 but 2.2% higher since November 2024).

Toast launched the menu pricing trend tool in May using data from 156,000 restaurant locations mainly in the United States but also in Canada, Ireland and the United Kingdom. The company uses Toast Benchmarking, which leverages an artificial intelligence (AI)-based classification tool to categorize menu items.

Steve Fredette, co-founder and president, said Toast established the data tool to offer “unique views into the restaurant community in an ever-changing landscape” and that the company would be sharing the information monthly. The November report was published Dec. 18.

Along with rising prices, restaurants have been struggling to attract increasingly budget-conscious consumers with menu innovations and special offers while simultaneously competing with grocery delis and heat-and-eat frozen entrees. They’re also contending with ever-increasing operational costs and challenging consumer trends such as GLP-1 users who are reducing their food spending.

The situation was reflected in the latest monthly Restaurant Performance Index (RPI) published by the National Restaurant Association (NRA), whose more than 40,000 members represent approximately 500,000 foodservice establishments (mostly restaurants).

Restaurant operators noted a net increase in same-store sales in October but reported lower customer traffic for the ninth consecutive month, according to the RPI. Many operators indicated they weren’t feeling too optimistic about the near term either.

Value will be the industry’s pivotal asset instead of price, according to Phil Kafarakis, chief executive officer of IFMA, The Food Away from Home Association.

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“Restaurant operators have a mixed outlook for sales, but nearly half expect overall economic conditions to deteriorate during the next six months,” the index said.

Phil Kafarakis, president and CEO of IFMA, The Food Away from Home Association, said speed, agility and strategic consolidation will determine the winners in 2026 among restaurant operators and the food-away-from-home industry in general.

Among other predictions for the coming year, he said value will be the industry’s pivotal asset instead of price.

“Consumers aren’t returning to $25 to $30 price points, forcing restaurants to rely on aggressive (limited-time offers), bundled offers and menu engineering instead of price increases,” Kafarakis said.

AI’s potential for the industry

Artificial intelligence will be a survival tool and not a tech experiment as brands deal with labor shortages and margin pressure, Kafarakis said. AI use will support more personalization, along with preorders and back-of-house automation, he said.

The recently released 23rd annual Baum + Whiteman Food and Restaurant Trends Forecast for 2026 took a similarly encouraging view of the potential for AI use in the restaurant industry.

Not only are more AI applications coming in the food and restaurant space, but the annual forecast highlighted the technology’s ability to develop a new menu item in six seconds.

The tool also can address consumers using weight-loss drugs, said Michael Whiteman, president of the Brooklyn, NY-based international food and restaurant consulting company.

“If I were a restaurateur, I could ask AI to look at my menu and recommend three dishes that would be suitable for people who are on Wegovy, and I have every confidence that AI would have given me a good response, and generally AI would then ask me further if I’d like recipes for these dishes,” Whiteman said.

Restaurant companies, including the big chains, are trying to address the issue, Whiteman said, and an effective approach is likely to require menu overhauls and different messaging to acknowledge GLP-1 users without excluding others.

Is consolidation coming?

The restaurant industry is likely to respond to continuing margin pressure, capital constraints and ongoing cost volatility by making some big changes, Kafarakis said.

Weaker industry players will be pushed to merge, sell or exit, which will make consolidation a more structural trend than a cyclical one, he said. And, as traditional restaurant traffic continues to soften, he expects growth to shift to convenience stores, which are increasingly stepping in to take the place of quick-service restaurants, and to other foodservice providers, such as education, health care and senior living facilities.