Restaurant operating expenses have jumped 36% over the past six years, according to an analysis published by Restaurant Business Magazine — a pace of cost growth that has outstripped menu price increases at many operators and forced a structural rethinking of how restaurants are staffed, sourced and priced.

The 36% figure covers the period since roughly 2019, spanning the pandemic shutdowns, the labor-market tightening of 2021 and 2022, and the food-inflation surge that pushed commodity and packaged-goods costs to multi-decade highs. For a typical full-service restaurant already running thin margins — where prime cost (food plus labor) routinely consumes 60% or more of sales — an expense base expanding at that rate leaves operators with two levers: raise prices faster, or engineer costs out of the business.

The scale of the increase helps explain several shifts now visible across the industry. Menu prices at both limited-service and full-service chains have risen sharply since 2019, with many public operators reporting multiple rounds of pricing well above historical norms. At the same time, chains have invested in labor-saving equipment, kiosk and app ordering, and back-of-house process changes designed to hold down the hours needed per dollar of sales.

The cost pressure has not fallen evenly. Company-operated units at large chains have generally had the scale and supply-chain leverage to negotiate commodity contracts and absorb wage increases, while franchisees — who pay royalties and often carry their own debt service on buildouts — have felt the squeeze more directly. That dynamic has driven much of the recent friction between franchisors and franchisee associations over mandated remodels, delivery discounts and technology fees.

Six years of compounding costs also reset the baseline for new-unit economics. Opening a restaurant today requires materially higher revenue to hit the same return operators expected in 2019, which has pushed developers toward smaller footprints, drive-thru and drive-thru-only formats, and conversion of second-generation spaces rather than ground-up construction.

For independent operators, the 36% increase lands on top of a credit environment that tightened sharply over the same period. Higher food, labor and occupancy costs coincided with rising interest rates on the debt many independents carry, compressing the cash flow available to absorb shocks.

The Restaurant Business analysis arrives as operators head into another round of annual planning, with food-commodity forecasts and state-level minimum wage increases — including the ongoing stepped increases in California — set to add further cost layers in the year ahead. Operators who have not yet rebuilt their cost structures around the new baseline will face a widening gap between their expense growth and the 36% benchmark the industry has already absorbed.