The restaurant industry faces mounting challenges as fewer Americans dine out. Higher costs for owners are colliding with declining foot traffic, forcing closures or cutbacks nationwide and leaving workers unemployed heading into the holidays.
“Restaurants are tough even in the best of times,” said Derek Kitchen, owner of Laziz Kitchen in Salt Lake City.
For Kitchen, this year has been particularly brutal. Inflation and tariffs have forced him to close two of his three locations.
“The inflation itself really took a lot out of us, and then tariffs kind of brought us to our knees, to be honest with you,” Kitchen said.
A recent study from YouGov found that 37 percent of Americans are eating out less frequently than a year ago as menu prices have risen.
The financial strain on households is changing how people spend when they do dine out. Customers are sharing meals and ordering fewer alcoholic drinks to cut costs.
“It’s really tough because prices have just been rising, and a lot of consumers don’t feel as though their salaries have kept pace,” said Justine Rapp Farrell, a professor of marketing at the University of San Diego’s Knauss School of Business.
Ying Nance, owner of Chubby Baker in downtown Salt Lake City, has watched costs skyrocket across her business.
“The cost of goods has gone up 35 percent, and payroll has gone up 39 percent,” Nance said.
Immigration policies are adding another layer of difficulty for restaurant operators. More than 137,000 restaurant workers have left the industry since March, according to a report from One Fair Wage.
“We had been hearing from workers and employers that the immigration enforcement going on right now is devastating to the industry,” said Saru Jayaraman, founder and president of One Fair Wage.
The organization projects the losses could grow significantly.
“I think you could see anywhere between 300,000 and 500,000 workers lost,” Jayaraman said.
In Arizona, restaurant owner Adriana Zapata said she saw immediate impacts following the recent election.
“Right after the election we saw a decrease in store traffic. Right away the customer base dropped,” Zapata said.
The effects extend beyond customer traffic to staffing challenges.
“Now the second drop — the drop in applications coming in,” Zapata said.
As the holiday season approaches, traditionally the busiest time for restaurants, the industry is counting on customers to fill dining rooms.
The National Restaurant Association reported negative customer traffic for the eighth consecutive month in September, making the industry a key indicator analysts are watching closely for broader economic health.
