“Averages can lie,” says Marc Cohen, solutions architect at Restaurant365. “Operators that are protecting their margins don’t get lost in a sea of KPIs—they track the handful that matter, and they track them at a granular level.” As quick-service brands head into 2026, that mindset may prove to be the difference between growth and erosion.
While inflation has cooled compared to the peaks of the past two years, food and labor costs continue to climb, and traffic remains unpredictable. The challenge, highlighted in Restaurant365’s 2026 State of the Restaurant Industry Report, is no longer just about managing labor shortages or raising menu prices—it’s about protecting profitability with sharper visibility, tighter execution, and a disciplined focus on the metrics that truly drive margin.
“Sales trends and finding ways to increase top line revenue are the priority focus for 2026,” Cohen says. “The wise investment is in employees who help drive guest frequency and spend. Execution directly correlates to the guest experience which is essential to creating raving fans.”
With rising food cost inflation reported by 91 percent of operators surveyed for the report, real-time analytics on purchasing and usage have become fundamental components of any operator’s tech stack in 2026. “Leveraging those tools beyond just price tracking and waste is about finding efficiencies in the product,” Cohen says. “Portion control continues to be the biggest blind spot for more operators and often the last place they look when trying to control costs.”
Inventory refinement and supplier relationship management are also top tactics identified in the report. But their impact depends on how strategically operators use their data. “Try to get contract pricing in place for key items,” Cohen says. “Then set pricing thresholds and alerts. That takes the guesswork out of auditing vendors and allows for violation reporting across operators’ product lines.” He also suggests shopping around—it’s a competitive market and leverage is powerful.
Margin pressure isn’t coming from the back of house alone. As operators refine inventory and supplier strategies, they must also account for a shift happening on the front end of the business: consumer behavior.
The report highlights continued movement toward off-premise dining, with more guests choosing takeout and delivery over traditional dine-in occasions. According to Cohen, many operators still underestimate how dramatically channel mix can influence profitability. “Off premise and third party need to be managed as distinct production lines because they incur additional costs that erode margins,” he says.
Recent trends show late night growing faster than breakfast, skewing heavily toward delivery. “Consider shifting focus for marketing and staffing to accommodate these additional hours of revenue,” Cohen says. “The key to making any takeout or delivery program successful is providing a quality experience.” Operators should analyze product mix carefully and remove items prone to failure in off-premise environments. Doing so can reduce refunds, protect margins, and preserve guest sentiment.
As operators adjust to shifting demand patterns, labor strategy must evolve alongside menu strategy. “Tying labor back to menus is a step operators often overlook,” Cohen says. “Poorly designed menus will drive up labor.” Instead of viewing staffing strictly through scheduling ratios, he advises operators to evaluate performance at the item level: “Start to look at labor minutes per item as well as waste and remake rates.” That level of visibility can uncover inefficiencies tied to menu complexity and execution.
Cross utilization, Cohen adds, shouldn’t stop at ingredients. “As we look to cross-utilize ingredients, how can we also cross utilize our labor pool?,” he asks. Incentivising team members to learn new skills and stations—through more shifts or better pay—will promote an environment of learning and development.
Looking beyond cost control, the data also points to clear revenue opportunities for operators willing to rethink their digital strategy. “Shifitng away from third party to first party gives operators loyalty and marketing leverage, plus entirely new datasets to drive those critical guest KPIs,” Cohen says. Owning the guest relationship unlocks deeper insights into frequency, spend, and behavior—insights that can fuel smarter marketing and long-term growth.
Cohen also points to kiosks and digital ordering platforms as powerful margin drivers. “Digital allows consumers to modify to their heart’s content, driving up spend and creating that must-have menu item to increase frequency,” Cohen says. In 2026, innovation isn’t about adding technology—it’s about using it to stay relevant. As Cohen puts it, “Relevance equals revenue, and profitability equals power.”
To explore the full findings and actionable insights from Restaurant36’s 2026 State of the Restaurant Industry Report, download the report.
By Abby Winterburn
