The first thing Panda Express CFO David Landsberg does when he wakes up is check the chain’s sales from the day before. These days, he’s waiting for the impact of sky-high gas prices to show up in the numbers.
“It's just this overhang that's out there,” he said during a panel at the Restaurant Leadership Conference (RLC) on Wednesday. “When you've gone from negative 5% year-over-year spend on gas to plus 20% overnight, that money's coming from somewhere.”
As of Thursday, the average price for a gallon of gas was $4.03, a slight decline from a week ago. But if prices stay where they are now, Americans will end up spending an extra $125 billion to fill up their tanks this year, said Chad Moutray, SVP of research and chief economist for the National Restaurant Association.
“We worry about the impact that would have on sales and traffic,” he said. It won’t be devastating—restaurants are a nearly $1.6 trillion industry—but it’s “certainly something that’s notable.”
The war in Iran and its effect on U.S. pump prices hovered over RLC, an annual gathering of industry execs in Scottsdale, Arizona. They are just the latest issues to hit an economy that is already mixed at best: Restaurant sales have been quite resilient, and the stock market is booming, but consumer sentiment reached an all-time low this month, and employment numbers are showing signs of weakness. Historically high beef prices are also an acute concern for many restaurants.
And, thanks to those rising fuel prices, inflation is ticking up again, which will likely push back the timeline for long-awaited interest rate cuts. The Federal Reserve’s goal is to get inflation to 2% before making changes; right now, it’s at around 3%. Even with President Trump’s hand-picked chair, Kevin Warsh, expected to replace current chief Jerome Powell in May, it may be tough to drum up the votes needed to lower the rate until inflation eases.
“I think the soonest you're gonna see the rate come down is probably October to December,” Moutray said.
At this point, there’s no telling how long the war will last, or how long Iran will maintain its stranglehold on the Strait of Hormuz, a key oil transport route. The net result is another big dose of uncertainty for both consumers and restaurants.
“I think the consumer is very uncertain,” said Tiffany Furman, CFO and chief development officer for KFC U.S. “Especially with our consumer, which is sometimes a little bit of the lower-income consumer, they're much more sensitive to gas prices.”
Like many brands over the past two years, KFC has responded by leaning into value, but not just with lower prices. It’s thinking about innovation, convenience and food quality. Its new Value Feast lineup offers three meal boxes priced at $7, $9 and $11 and highlights the chain’s boneless chicken options, like Snackers and nuggets.
“That combination of value, but also educating the consumer that we play in that boneless space, has been really successful,” Furman said.
At the same time, restaurants are investing in service and experience in a bid to impress consumers with fewer dining dollars to spend. A new KFC prototype, for instance, is designed to give employees more interaction with customers, among other updates, Furman said.
Panda Express prioritizes hiring good people to provide the best service, and will pay above market rate to attract talent—even in its home market of California, where the minimum hourly wage for fast-food workers is now $20.
Full service Wahlburger’s also believes that offering a good experience is the key to winning over customers at a time when they have to pay more for their meal.
“If you shortchange the guest experience, they're gonna be angry, because there's a lot more dollars going in the gas tank today than it's going anywhere else,” said CEO Randy Sharpe.
During a presentation by researcher Technomic on Tuesday, Senior Principal and VP of Innovation Rich Shank noted that restaurant chains that invested in operations and service grew eight times faster than average in 2025.
Still, inflation is impacting restaurants’ finances too, which can make those sorts of investments tough to pencil out. Technomic data shows menu price hikes starting to creep up again after normalizing at the end of last year.
Panda Express raised prices two weeks ago to help cover rising costs, a move it had been planning since before the war, Landsberg said. He acknowledged that now is not the ideal time to do that, but as a private company, Panda Express is able to take a long-term view.
“We've been dealing with uncertainty since March of 2020, so in a lot of ways, it's nothing new,” he said.
Sharpe said that operators have to separate their short- and long-term issues into two buckets, and to try not to worry too much about the short-term.
“Don't get overly emotional over the next six months,” he said. “If you're in it for the long haul, which all of us are, and you have a plan, and you understand what's gonna happen, you'll be fine.”
The market is always going to be volatile, he said, whether it’s commodities, labor or traffic patterns. So when looking long-term, Wahlburger’s likes to focus on signing great real estate deals.
“That's a big piece at the bottom of the P&L that if you can actually set that up, that's your long-term win,” he said.
At this point, restaurants should be used to this sort of thing. Ever since the pandemic, it seems, the industry has been navigating one crisis after another.
“It's a little like wack-a-mole,” Moutray said. “When I talk to restaurant operators, they're just like, ‘Every time we think we're turning a corner, we have another hit against us.’”
In trying times, he said, restaurants need to double down on the basics.
“Focus on that overall experience so that you can, again, increase those overall traffic trends, which were starting to move a little bit in the right direction before the war,” he said. “Hopefully we can get back to that, at some point.”
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