Editor's note: This story has run in the print edition of Nation's Restaurant News and is available here for RB+ subscribers.
2026 was supposed to be the year that restaurant operators started to see some cost pressure relief after five years of hindering inflation impacting everything from labor to eggs to energy. But a giant, Iran War-sized wrench has derailed such expectations.
So here we are. Still navigating an inflationary period that has been as much unpredictable as it’s been relentless. And still forcing operators to get creative on finding cost-saving tactics. Those tactics are touching every part of the business, including the profit-and-loss statement vampires of rent, labor, and food, and — more than ever — the middle of the PnL, like insurance, utilities, and cleaning and sanitation contracts.
“The restaurant business is a challenge even in the best of times,” said Jean Hagan, partner at advisory group EisnerAmper. “But it is downright chaos out there right now. A majority of operators don’t look at the PnL until there’s trouble, but they should be looking at that stuff every month.”
That’s just one of the recommendations Hagan has for operators in dire need of a map. She also notes that prepping and portioning is an often overlooked but critical starting point when it comes to saving money.
“I have a client, a well-known Mexican restaurant, who takes a lot of pride in using the best meat you can buy. But they don’t do prep well. They do a terrible job portioning on the plate, so they have waste,” she said. “If you’re serving 6 ounces of guacamole, but not measuring it, just eyeballing it, and it ends up being 8 ounces, that’s 2 ounces of extra guacamole on every single plate. And they’re wondering why their food costs are higher. Prepping, portioning, and sticking to those standards throughout the process is an important first step.”
If operators get to the point where they have to raise prices, Hagan recommends only doing so on a few items versus a blanket increase.
“A couple of items can swing you back into your theoretical food costs. But you have to have a good baseline for those decisions and not be making them in the dark,” she said. “Have a recipe and inventory system in place, even if it’s old school on (a spreadsheet).”
Hagan’s final recommendation is to make sure operators are advocating for themselves. This environment is tough for everyone involved in the business pipeline, from farm to kitchen. With the Iran War backdrop, she expects vendors to begin implementing fuel surcharges, as many have done in the past when gas prices surge.
“They always go right for the jugular. Just say, ‘No, we’re not paying a fuel surcharge.’ We’re all dealing with this and if your business isn’t valuable enough for them to waive a fuel surcharge, you can find another vendor,” she said. “Also, raise your prices a dollar or so instead of charging customers a surcharge. This helps protect your brand’s reputation.”
Managing higher food costs
To understand how operators are managing the current environment, it’s important to first understand the biggest challenges impacting them. Chuck Imerson, CEO of Asian Box, a Vietnamese concept with seven locations, said food and labor are the most “controllable and impactful expense lines, so they remain our primary focus.” The company evaluates both daily and shares learnings across the organization.
According to the National Restaurant Association, food costs have risen 34% compared to the pre-pandemic levels of six years ago. As such, several brands have made changes to the menu or supply chain to manage the current environment. Wienerschnitzel worked with its key suppliers to reduce costs and increase case sizes, for instance.
“Additionally, we adjusted protein percentages to take advantage of commodity fluctuations without compromising quality, and modified our bun supplier in select markets,” said Chief Operating Officer Rusty Bills. “We also renegotiated distributor terms and fuel charges to better align with rising gas prices.”
The renegotiations were completed just before gas prices spiked, allowing the chain to remain below previous cost levels. Wienerschnitzel also recently expanded its combo offerings from four to 12, while promoting its two most popular combos. This has simplified the ordering process, reduced the need for upselling, and driven increased attachment rates for fries and drinks by approximately 15%, Bills said.
Golden Corral has expanded its variety across its signature buffet menu, which not only provides more choices and value options for guests, but also reduces the company’s reliance on any single high-cost ingredient.
“This includes broadening our protein lineup with options that complement guest favorites, like sirloin, and helps offset rising beef costs,” said Chief Operating Officer Roy Hinojosa. He added that the company is constantly working to incorporate “cost-mitigating menu items” to offset inflationary pressures. “This includes expanding certain categories, introducing more value-driven items, and maintaining the right mix of premium proteins alongside more cost-effective options. It’s about continuously optimizing the buffet to deliver strong value and guest satisfaction and protect margins in an inflationary environment.”
Asian Box recently put waste logs into place to identify training opportunities and reduce unnecessary losses, which supports both product quality and margin improvement, Imerson said. The company is also focused on developing limited-time offers that are more cost-effective.
“We’re taking a disciplined approach to pricing while focusing on limited-time offers and promotions that are both value-oriented and responsive to consumer price sensitivity,” Imerson said.
The Breakfast Brothers, a Texas-based full-service brunch concept, has tightened up its portion control and product standardizations, especially with high-cost proteins like lobster and salmon. CEO and Co-Owner Rickey Booker said those items are now all weighed and controlled to eliminate overuse.
“We’ve also streamlined the menu, removing low-margin items and reducing unnecessary SKUs, which helps with both cost control and kitchen efficiency,” he said. The concept’s promotions are focused on high-margin items, like waffles and coffee. These efforts have helped improve food costs, reduce waste, speed up ticket times, and increase average ticket size, Booker said.
Booker’s advice is similar to Hagan’s: “You can’t manage what you don’t measure. Control your portions like your business depends on it, because it does,” he said.
Wienerschnitzel worked with its key suppliers to reduce costs and increase case sizes, for instance. | Photo courtesy of Wienerschnitzel
Managing higher labor costs
In addition to managing higher food costs, controlling labor costs is also more critical than ever. Indeed, according to the National Restaurant Association, labor costs now represent an outsized share of outlays than in the past, representing above 36% of sales in 2024 at full-service restaurants, and 31.7% at limited-service restaurants. On average since 2010, those numbers were approximately 33% and 28%, respectively.
In response, Wienerschnitzel has reduced or eliminated mundane prep tasks while staggering employee start times in 15-to-30-minute increments to better align with peak periods. Additionally, a digital labor forecasting tool is currently in test to help franchisees schedule more efficiently, and nearly 100 locations now use AI-powered drive-thru solutions, which has helped reallocate labor and reduce costs by about 10%, Bills said.
Meanwhile, Golden Corral created a customized labor model from time and motion studies to establish productivity targets. Hinojosa said the company recently developed a proprietary tool to enhance this model, allowing the company to create an even more optimized and precise schedule.
“It enables us to more effectively match staffing to traffic patterns … without overextending labor hours,” he said.
Notably, Golden Corral is in year two of a technology overhaul designed to streamline operations by reducing manual and administrative tasks and strengthen business intelligence capabilities.
To manage its labor line, The Breakfast Brothers implemented split shifts and “weekend-heavy” staffing models to align with peak demand while avoiding overstaffing during slower periods. Training has also become a bigger focus, and Booker said cross-training allows staff to flex between roles.
“Train your team relentlessly because execution is everything,” he said.
Continued adjustments expected
With so many uncontrollable factors at play, these operators expect to continue making modifications across every facet of the business to protect their margins.
“We’re operating in a highly dynamic environment. Given the level of uncertainty, we are consistently monitoring conditions and making data-driven adjustments where needed,” Hinojosa said. “At the same time, we stay grounded in what we can control — executing at the highest level for every guest, every time.”
Hagan adds that while it’s important to be agile, it’s equally important to stick to what you know.
“You have to stay true to who you are and deliver a consistently good product and service,” she said. “That’s the one thing that always sees restaurants through bad times. The ones that start jumping all over the place, adding breakfast or 24-hour happy hour, or whatever — they end up washing out. Stay true, deliver the right product, service, and environment for your guests, and you’ll get through it.”