Despite three years of elevated inflation and a lot of uncertainty about the trajectory of the U.S. economy, Americans have yet to lose their appetite for dining (and drinking) out. According to the National Restaurant Association, restaurant industry sales are expected to reach $1.5 trillion this year - a new record for the industry that employs more than 15 million people. "Nine out of 10 people enjoy going to Restaurants and restaurant operators understand what it takes to keep that experience positive," Michelle Korsmo, president & CEO of the National Restaurant Association, said earlier this year. "Operators are adapting to meet today’s consumers’ wants and needs with an eye to economic pressures, regulatory changes and rising food and labor costs."
Those claims are backed up by data from the U.S. Census Bureau, which underscores the industry's strength and resilience over the past few, undoubtedly challenging years. According to advance estimates from the Census Bureau's monthly retail sales report, sales of food services and drinking places amounted to $97.4 billion in May 2025, up 5.3 percent from the same month a year ago. While some of that increase can certainly be attributed to higher prices on the menu, the Bureau of Labor Statistics reported that the Consumer Price Index for Food Away From Home increased 3.8 percent year-over-year in May, indicating that the increase in sales can only party be attributed to higher prices.
In fact, sales growth of restaurants, bars etc. has outpaced price increases quite significantly over the past five years. Since February 2020, food services and drinking places, as they are officially called, have seen (seasonally adjusted) monthly sales climb 45 percent. Meanwhile consumer prices for food away from home have risen by 32 percent and prices of alcoholic beverages away from home have risen by 22 percent.
According to Michelle Korsmo, restaurants have taken a hit on their bottom line, though, trying not to pass the full increase in food prices on to customers. "Restaurant operators know consumers are very sensitive to costs and have kept menu price increases to 30 percent, while their food costs have gone up 40 percent in the last five years," she said in a statement following the announcement of reciprocal tariffson April 2, adding that the new tariffs could bring many restaurants to a breaking point. "Applying new tariffs at this scale will create change and disruption that restaurant operators will have to navigate to keep their restaurants open. The biggest concerns for restaurant Operators are that tariffs will hike food and packaging costs and add uncertainty to managing availability, while pushing prices up for consumers."
