How has the tariff talk impacted consumer traffic at restaurants? Are better-run restaurants the key to profitability? Answers to these questions and more This Week in Foodservice.

Despite riding an economic roller coaster in recent months, restaurant operators remain surprisingly confident, per data from Technomic. In fact, its operator confidence monitor, which measures the current and future state of business, sits at relatively elevated levels. That said, operators report feeling the pinch from tariffs across a variety of areas, including disposables (61%) and equipment (64%).

So, what’s the source of this confidence?

Operators have been made changes to their to prepare for more headwinds, including swap ingredients for a more local source (40%), raise prices (31%), examine each SKU for tariff-related price changes (28%), stockpile key purchases (20%) and make service changes (25%). These preparations have operators feeling confident that they can weather a challenging market, at present.

Foodservice News

• Restaurant traffic has yet to suffer due to the recent economic turbulence, per a Restaurant Dive report from The National Restaurant Association Show. At least not yet. True, consumer traffic to restaurants is down, but that’s part of longer-term trends impacting the industry, Circana’s David Portalatin said. “If we looked at the last four weeks of restaurant traffic, it’s relatively about the same trend that we’ve observed over the last 52 weeks. Minus two.”
• While much has been made of rising labor and food costs for restaurants, that’s not the expense line that’s increased the most since 2019. Credit card swipe fees have gone up 32% since 2019, followed by labor (31%) and food (29%), per data from the National Restaurant Association’s State of the Industry study for 2025. As if that were not enough, three other expense areas have increased by double digits since 2019: supplies (20%), utilities (16%) and occupancy (12%). Given how expenses have increased across the board for restaurants, it should come as no surprise that average menu prices have increased 27.2% over the same period, per data from the U.S. Bureau of Labor Statistics. And the average price increase needed to cover input costs and maintain margin is 26.2%, per the NRA. In other words, restaurants continue to face pressure from all directions.
• Expect a modest decline in food-away-from-home spending, according to one financial analyst. Fitch Ratings feels the U.S. restaurant industry faces “significant risk” from tariffs and immigration policy, per a Restaurant Dive story. Full-service operators are most likely to feel pressure from the trade barriers, Fitch said, though “the ultimate impact of the tariff will depend on food basket exposure and workforce composition.”
• When it comes to improving its overall operations, Popeye’s plans to lead by example. The chain has struggled to gain consistent growth, but feels better-run restaurants are the answer, as Restaurant Business reports. Popeye’s seeks to make its 100 corporate units “the example for the entire system,” according to its CEO. The chain has also slowed its domestic unit growth to give the company’s restaurants a chance to adopt better operations practices.
• Bojangles expansion efforts continue to gain momentum. The chain opened 10 corporate and franchised units in recent months, per a QSR Magazine story, which put the chain in some new markets. The chain’s growth plans include expanding in the Northeastern U.S.

Economic News

• The Conference Board’s Leading Economic Index for the U.S. dipped 1.0% in April, the largest monthly decline since March 2023. “Notably, consumers’ expectations have become continuously more pessimistic each month since January 2025, while the contribution of building permits and average working hours turned negative in April,” said The Conference Board’s Justyna Zabinska-La Monica.
• S. retail and foodservices sales increased 0.1% in April 2025 compared to the previous month, per the advance estimate from the U.S. Census Bureau. This increase was slightly better than economists' projections for the month but also represents a significant drop from the 1.7% increase posted in March, per a Yahoo! Finance report. April’s sales of $724.1 billion also represent a 5.2% increase from the same month in 2024.
• Consumer sentiment was “essentially unchanged” in April, per the latest data from the University of Michigan. Its Index of Consumer Sentiment ticked down 1.4 points, following four consecutive months of steep declines. Coming at 50.8 for the month, this is the second-lowest reading for this study on record, per CNBC. “Many survey measures showed some signs of improvement following the temporary reduction of China tariffs, but these initial upticks were too small to alter the overall picture – consumers continue to express somber views about the economy,” said Joanne Hsu, Surveys of Consumers director, in a statement.
• The Producer Price Index fell 0.5% in April, the U.S. Bureau of Labor Statistics reported. The BLS attributes the April decline to prices for final demand services, which decreased 0.7% - its largest dip since the index was founded back in 2009, per the Wall Street Journal. The index for final demand goods was unchanged. Excluding volatile food and energy prices, so-called core wholesale prices dipped 0.4% from March and rose 3.1% from a year earlier.
• Industrial production was flat in April when compared to the previous month, per the U.S. Federal Reserve. April as declines in manufacturing and mining output were offset by growth in utilities output. Market expectations called for a 0.3% increase, per an Industry Week story.
• The housing market offered some mixed results in April. Building permits for privately-owned units declined 4.7% from the previous month, but housing starts increased 1.6% compared to March, per data from the U.S. Census Bureau.