Breaking News

Consumers Keep Dining Out but Shift Spending Toward Lower-Cost Restaurant Choices

• Consumers continue to prioritize restaurants over other discretionary purchases, helping support traffic levels despite ongoing economic uncertainty.
• However, many diners are reducing restaurant spending by ordering fewer add-ons, choosing lower-cost options, and limiting visits, creating continued pressure on check averages and sales growth. SOURCE | NATIONAL RESTAURANT ASSOCIATION

Proposed Immigration Bill Could Expand Restaurant Labor Supply and Workforce Stability

• The National Restaurant Association is supporting the Dignity Act of 2025, a bipartisan immigration reform proposal that would create pathways to legal status for certain workers and modernize employment verification requirements.
• If enacted, the legislation could help expand the restaurant labor pool and improve long-term workforce stability in an industry facing persistent staffing shortages. SOURCE | NATIONAL RESTAURANT ASSOCIATION

Starbucks Ends AI Inventory Program, Highlighting Risks of Unproven Restaurant Technology

• Starbucks has discontinued its AI-powered inventory management system less than a year after launch, citing a shift toward more accurate and consistent inventory processes.
• The move highlights the risks of adopting unproven restaurant technology and reinforces the importance of evaluating whether automation delivers measurable operational benefits before investing at scale. SOURCE | RESTAURANT DIVE

Pricing

USDA Forecasts Higher Food Costs for Restaurants as Beef and Produce Prices Rise

• USDA forecasts food-away-from-home prices to rise 3.5% in 2026, while several key restaurant ingredients, including beef, vegetables, and nonalcoholic beverages, are expected to see above-average price increases. Although declining egg prices may provide some relief, operators should continue monitoring food costs as higher beef and produce prices put pressure on margins. SOURCE | USDA Economic Research Service

Value Promotions Boost Traffic but Squeeze Restaurant Margins

• McDonald’s reported another quarter of sales growth as value-focused promotions continued to attract price-sensitive consumers. However, rising beef costs and ongoing margin pressure highlight the challenge many restaurant operators face in balancing traffic growth with profitability. SOURCE | RESTAURANT BUSINESS

Industry

Restaurant Sales Hold Steady as Customer Traffic Continues to Lag

• Restaurant operators reported modest improvement in same-store sales during April, but customer traffic remained weak across much of the industry. The results suggest that menu pricing and higher check averages continue to support sales, while many operators still face ongoing challenges attracting additional guest visits. SOURCE | NATIONAL RESTAURANT ASSOCIATION

Cava Shows Consumers Still Spend When Restaurants Deliver Strong Value

• Cava reported 9.7% same-store sales growth and 6.8% traffic growth in the first quarter, outperforming much of the fast-casual sector. The company credits its results to a strong value proposition, menu innovation, leadership development, and new restaurant expansion, offering evidence that consumers continue to spend when restaurants deliver perceived value and a differentiated guest experience. SOURCE | RESTAURANT DIVE

Labor

Restaurants Add Workers at Fastest Pace in More Than Three Years

• Restaurant hiring accelerated in May, posting its strongest payroll growth in more than three years as operators continued to expand staffing levels.
• The increase suggests improved confidence in near-term business conditions, though many restaurants remain cautious about consumer spending and are closely managing labor needs heading into the second half of 2026. SOURCE | NATIONAL RESTAURANT ASSOCIATION

Regulatory

Illinois Delay Keeps Credit Card Fees on Restaurant Tips and Taxes

• A federal court blocked Illinois’ law that would have prohibited credit card interchange fees on tips and taxes, while state lawmakers delayed implementation until 2027. The setback preserves a significant payment processing cost for restaurants and highlights the ongoing legal and regulatory challenges surrounding swipe fee reform efforts. SOURCE | RESTAURANT DIVE

Proposed Joint Employer Rule Could Reduce Labor Compliance Uncertainty

• The U.S. Department of Labor has proposed a new joint employer rule that would establish a national standard for determining labor law responsibility and compliance obligations.
• Restaurant industry groups say the proposal could reduce uncertainty for franchise operators and franchisors by providing clearer guidance on wage-and-hour liability and employment relationships. SOURCE | NATION’S RESTAURANT NEWS

Technology

Restaurant Executives Warn Against AI Investments Without Clear Operational Benefits

• Restaurant technology leaders cautioned operators against adopting AI without a clear operational benefit, emphasizing that technology investments should improve efficiency, labor productivity, or guest service.
• While AI can help automate administrative tasks and provide better business insights, industry executives said it works best as a tool to support decision-making rather than replace core restaurant operations. SOURCE | RESTAURANT DIVE

Chipotle Reports Sales Gains From Restaurant Efficiency Investments

• Chipotle is expanding high-efficiency kitchen equipment, AI tools, and digital operations technology after reporting stronger sales performance in restaurants using the upgrades.
• The company says the investments are improving labor productivity, order accuracy, speed of service, and customer satisfaction, highlighting how operational efficiency can support restaurant sales growth and margin performance. SOURCE | RESTAURANT DIVE