Restaurants are struggling to turn a profit amid sky-high food costs, prompting many to consider raising prices unless inflation is brought under control.
In its 2025 Restaurant Industry Survey, restaurant management software company Toast says profitability was revealed to be the biggest concern among operators heading into 2026.
One-fifth of operators ranked inflation as the top concern, followed by marketing (16%) and hiring (16%). Nearly half of the 712 decision-makers who participated in this year’s survey indicated they plan to increase menu prices if inflation persists as a factor next year.
According to one estimate from the National Restaurant Association, to maintain a 5% profit margin, the average restaurant would need to increase prices by over 30%.
“Raising menu prices is typically a last resort for restaurant operators, but with the rising costs of food and labor, their operating math still has to work,” Chad Moutray, chief economist for the National Restaurant Association, said to Fox News Digital.
Michael Brafman, who operates The Sandwich Board in New York City, is concerned about the still lofty price acceleration in the economy.
“The basic math is whatever product you have, you divide it by .3, and that’s what the product should cost to the consumer to operate at that healthy margin,’ Brafman said. “If the prices continue to increase, there’s only [so much] that the consumer will be willing to pay.”
Brafman said he resisted raising the price of their egg sandwiches, but eventually relented.
“You can only get away with charging so much for an egg sandwich. . . . Nobody’s spending $17 on an egg sandwich just so you can keep your margins.”
In particular, Brafman noted the challenge in keeping up with the soaring costs of proteins.
“Proteins are increasing exponentially — eggs, dairy, meat, poultry, all of the core parts of the sandwich,” he said.
“When a steak per pound goes from $7 to $11, that’s an unrealistic price increase.”