Trends and Challenges in the Restaurant Industry Today and What’s Coming in 2026

Restaurant owners today are operating in very challenging environments. Post-COVID staffing shortages persist and many of the workers who left the industry have not returned. As a result, restaurants are relying more heavily on newer, less-experienced team members at the same time guests are paying more and expecting more. Inflation continues to push up labor, food and operating costs, tightening margins and forcing operators to rethink profitability from the ground up. Guests have become more value-conscious, but they still expect emotionally engaging, personalized service with every visit.

Looking ahead to 2026, we expect these pressures to intensify. Talent shortages will continue, guest expectations will rise and operators will need to focus on bringing guests in, but on maximizing the value of every guest already in the building. Technology will play a major role, especially tools that give managers clearer visibility into frontline performance, support training for inexperienced staff and create more consistency across shifts. The restaurants that succeed in the coming years will be those that operationalize consistency and build a culture of strong engagement and service-driven revenue.

Rising Costs: Rethinking Profitability and Guest Experience

The sharp rise in labor, food and operating costs has changed how restaurants must think about profitability. The old model, simply driving higher guest counts, no longer works on its own. To remain profitable, operators must focus on maximizing revenue from the guests already in front on them. That means enhancing the guest experience through better engagement, more thoughtful recommendations and greater consistency across team members.

Profitability and guest experience are now inseparable. Restaurants can’t afford to leave money on the table through missed opportunities, an unrefilled drink, a forgotten recommendation, or a server who lacks confidence in describing high-margin items. These small lapses have an outsized impact on the bottom line. At the same time, guests are spending more on dining, so their expectations for service and personalization are higher than ever. As costs rise, frontline service becomes the most reliable, scalable way to influence both revenue and guest satisfaction. Better engagement leads to higher checks, higher tips, stronger loyalty and a more stable, motivated workforce.

 Technology to Improve Restaurant Efficiency and Profitability

While the industry has no shortage of technology for inventory management, reservations, or ordering, the biggest gap and the biggest opportunity, lies in tools that can improve frontline performance. Today, restaurant managers lack real-time visibility into how their people are performing, where revenue is leaking and which behaviors drive higher check averages. With high turnover and inexperienced staff, operators need technology that is operational and developmental.

The greatest opportunity for technology is in delivering tools that combine clear performance data with AI-insight driven coaching. Restaurants need systems that give managers insight into where each server excels, where they struggle and how their actions impact revenue and guest experience. Technology that can deliver training, track KPIs in real time, visualize trends and support consistent coaching, will make it possible for every team member, not just the top performers, to grow. 

Platforms that support culture-building, recognition and engagement will also become increasingly important, because motivated servers sell more, serve better, and stay longer. Restaurants need to start unifying training, performance analytics, and frontline engagement.

Frontline Service Impact on Revenue and Profitability

Frontline service is one of the most powerful and underutilized drivers of restaurant profitability. Every guest interaction, every refill, recommendation, and moment of awareness, has a direct impact on revenue. When servers are attentive, confident and emotionally connected to guests, they create experiences that make diners feel valued, but also inspire them to spend more. Strong service directly translates into higher tip earnings, which improves retention and morale.

Better frontline service reduces guest frustration, prevents small inconveniences from becoming big problems and creates a smoother, more enjoyable dining experience. When servers understand how their actions influence both the guest and the business, they shift from being order takers to revenue drivers. This transformation benefits everyone: guests receive richer, more memorable experiences; servers earn more and feel more confident; and operators gain a predictable, scalable way to improve revenue without raising prices or increasing guest count.

How Can Restaurants Use Data to Their Advantage

Restaurants increasingly recognize the need for clearer, more actionable data-but many operators struggle to access insights that are timely, simple and directly connected to frontline behavior. The most valuable data for operators is information that helps answer key performance and service questions, eg., How each team member performed on their last shift, where revenue may be leaking, which behaviors consistently drive strong results and where inconsistent service moments are occurring.

When operators have access to real-time performance trends, they can provide more relevant coaching, set meaningful goals, celebrate wins and strengthen service consistency across the board. Data becomes most powerful when it is paired with training, communication tools and opportunities for recognition-helping teams understand why their work matters and how to improve. The combination of clear insights, consistent coaching and an engaged frontline team creates a culture where service excellence becomes repeatable, scalable and directly connected to revenue.