The Progressive Policy Institute is pressing the Federal Trade Commission to take a hard look at Sysco's $29 billion deal for Restaurant Depot, arguing the transaction could push food prices higher for restaurants already squeezed by thin margins.

The deal, if completed, would consolidate two of the largest supply channels serving the U.S. foodservice industry. Sysco is the country's dominant broadline distributor, delivering food and supplies to restaurants, healthcare and education accounts across the market. Restaurant Depot operates on a different model: cash-and-carry wholesale warehouses that serve independent restaurants, caterers and small operators who pick up product themselves.

PPI's core argument is that these two channels overlap more than a casual reading suggests. Independent restaurant operators frequently buy from both — broadline distributors for delivered volume, cash-and-carry for spot purchases and quick restocks. If one company controls both pipes, the think tank warns, operators could face higher prices and fewer alternatives, particularly in markets where Restaurant Depot is the main cash-and-carry option.

The stakes are direct for restaurant economics. Food cost is typically the largest or second-largest line item on a restaurant P&L, running roughly 28% to 35% of sales for most full-service concepts. Any meaningful increase in wholesale pricing hits operators' prime cost at the worst possible moment, with labor costs elevated and consumer traffic still uneven across segments. Independent restaurants, which lack the purchasing leverage of large chains, would absorb the impact first.

The FTC has spent the past several years taking a more aggressive posture toward foodservice and grocery consolidation, and PPI's push is designed to put the Sysco–Restaurant Depot transaction on the agency's radar early. The think tank's warning frames the deal not as a routine vertical integration but as a horizontal concentration of purchasing power over the independent restaurant sector.

For Sysco, the acquisition would deepen its reach into the independent operator segment — a customer base that chains' negotiated supply contracts leave largely to distributors and cash-and-carry players. For Restaurant Depot's customer base of small operators, the question PPI raises is whether that access stays price-competitive once a single company controls both the delivery and pickup channels.

The FTC has not announced a timeline for any review, and the deal's terms beyond the $29 billion valuation were not detailed in PPI's statement. What is clear is the direction of the pressure: antitrust advocates want the agency to examine how much leverage the combined entity would hold over food costs for the nation's independent restaurants before the transaction advances.

The outcome will shape how hundreds of thousands of small foodservice operators source product — and at what price — for years to come.