America's restaurant industry is generating record sales, but higher revenue is masking weaker customer traffic, elevated costs, and widespread financial strain. The National Restaurant Association projects $1.55 trillion in industry sales during 2026, yet 42% of operators said their restaurants were not profitable in 2025.
Texas has become a focal point in the shakeout. An estimated 1,039 restaurant locations closed statewide during the first half of 2026, while Dallas-Fort Worth recorded approximately 240 closures. At the same time, takeout, drive-thru service, loyalty programs, private dining, and value-focused menus are reshaping where and how Americans eat.
The pandemic's precise permanent-closure toll remains difficult to calculate because restaurants temporarily closed, reopened under new ownership, relocated, or changed concepts.
In December 2020, the National Restaurant Association estimated that more than 110,000 eating and drinking establishments were permanently or indefinitely closed. By May 2021, after some temporarily shuttered businesses reopened, the association revised the figure to approximately 90,000 locations that were still permanently or long-term closed. (No comprehensive federal database tracked whether every temporarily closed restaurant later reopened, changed ownership, or was replaced.)
The labor market has not fully returned to its former composition. Full-service restaurants lost nearly 3.7 million jobs during the first two months of the pandemic, and employment in that segment remained 183,000 jobs below its pre-pandemic level as of June 2026.
Restaurant spending continues to grow, but customers are not necessarily visiting more often.
Inflation-adjusted sales at eating and drinking places increased 1.6% between July 2025 and July 2026, according to National Restaurant Association analysis of Census and BLS data (the strongest 12-month real gain in five months at the time of the August update). However, June marked the 16th month out of the previous 17 in which restaurant operators collectively reported a net decline in customer traffic.
The association's 2026 industry report found that more than seven in 10 consumers would use restaurants more frequently if they had additional disposable income. It forecasts inflation-adjusted sales growth of 1.3% during 2026.
Menu prices remain part of the equation. The Bureau of Labor Statistics reported that prices for food away from home increased 3.4% between July 2025 and July 2026. Full-service meal prices rose 3.4%, while limited-service meal prices increased 3.3%.
Restaurants are paying substantially more for ingredients than before the pandemic. The National Restaurant Association reported in March 2026 that food costs were approximately 34% above pre-pandemic levels; later association analyses and BLS Producer Price Index data put the figure at more than 35% (and as high as ~38% in some year-end 2025 references relative to 2019).
Labor has also become more expensive, even in Texas, where the state minimum wage remains $7.25 per hour. Employers commonly pay above that rate to recruit and retain workers.
The latest Bureau of Labor Statistics occupational estimates show that food-preparation and serving workers in Dallas-Fort Worth earned an average of $15.74 per hour in May 2025. Food-service managers in the region averaged $33.89 per hour.
The pressure is showing in operators' financial results. More than nine in 10 restaurant operators identified food, labor, insurance, energy, and credit-card processing fees as significant challenges in the association's 2026 report.
Texas has more than 57,000 restaurant locations, supports over 1.4 million industry jobs, and generates approximately $137.8 billion in annual sales, according to the Texas Restaurant Association.
Its size also produces a large volume of openings and closures. RestaurantData estimated that 1,039 Texas restaurant locations closed between January and June, the highest raw total among U.S. states. Dallas-Fort Worth recorded approximately 240 closures.
The company cautioned that its figures measure location closures, not bankruptcies or failure rates. Closures can result from expiring leases, relocations, ownership changes, conversions, corporate restructuring, or businesses ceasing operations.
Statewide operating data nevertheless show broad pressure. In the Texas Restaurant Association's third-quarter 2025 survey (of roughly 50+ operators), 88% reported higher food costs (40% significantly higher and 48% slightly higher), about 66% reported higher labor costs (10% significantly and 56% slightly), and 52% reported declining traffic (37% slightly and 15% significantly).
Recent Dallas Express coverage has documented the local consequences. Salad and Go, which previously operated more than 40 Dallas-Fort Worth locations, filed for Chapter 11 in early August 2026 and closed its remaining restaurants effective August 5. The company cited declining consumer demand, rising operating costs, and challenges from rapid expansion.
No restaurant category is immune from closures. RestaurantData found that quick-service businesses accounted for 51.5% of classified closures during the first half of 2026, although the company emphasized that raw totals do not measure a category's relative failure rate.
Still, consumer behavior favors restaurants that offer convenience at a price customers consider worthwhile. Nearly three out of every four restaurant orders are now placed for drive-thru, takeout, curbside pickup, or delivery, according to the National Restaurant Association's 2025 off-premises dining study. At full-service restaurants, the share of orders consumed away from the restaurant increased from 19% in 2019 to 30% in 2024. At fast-food, fast-casual, and other limited-service restaurants, it rose from 76% to 83%.
Texas operators have also reported continued strength in private dining, catering, and spending by higher-income customers. Those findings suggest a widening market: budget-conscious diners are seeking discounts, loyalty rewards, and convenient meals, while customers with greater disposable income continue paying for distinctive food and experiences.
The restaurant of the future is therefore likely to use a smaller footprint, more digital ordering, tighter menus, greater automation, and multiple revenue channels. Full-service establishments will face pressure to offer an experience customers cannot easily reproduce at home, while limited-service restaurants will compete heavily on speed, convenience, loyalty benefits, and price.