The Confidence Gap: Restaurant Operators Expect Growth in 2026. Their Customers Have Other Plans.

Something unusual is happening in the restaurant industry. Ask operators how they feel about 2026 and the answer is overwhelmingly positive. Ask their customers the same question and the answer is the opposite.

Popmenu's 2026 nationwide study of 328 restaurant leaders and 1,000 consumers, released in February, found that 88% of operators are either cautiously optimistic (63%) or very optimistic (25%) about their business prospects this year. At the same time, 68% of U.S. consumers told the same survey they are cutting back on restaurant dining to prioritize affordability and convenience. Consumers' average weekly restaurant spend dropped to roughly $90 in February 2026, down $25 from $115 in June 2025.

That is not a small disconnect. It is a chasm. And the data from nearly every major industry research firm suggests the consumers may be the ones reading the room correctly.

The Operators' Case for Optimism

The bullish case is not imaginary. TD Bank surveyed 253 restaurant franchise leaders at the 2025 Restaurant Finance and Development Conference and found 82% expect improved or stabilized industry growth in 2026. Sixty percent said they are confident their business will achieve positive traffic over the next 12 months.

There are reasons for cautious hope. National Restaurant Association projections put 2026 industry sales at $1.55 trillion, representing 1.3% real growth. The industry will add more than 100,000 jobs. Specific brands are performing well: Darden Restaurants reported consolidated same-store sales growth of 4.2% in its fiscal Q3 ending February 2026, with all four of its largest brands exceeding Black Box Intelligence's industry benchmark by more than 400 basis points.

CEO confidence, at least among the largest companies, has rebounded. The Conference Board Measure of CEO Confidence surged to 59 in Q1 2026, up 11 points from 48 in Q4 2025, with Dana M. Peterson, the Board's chief economist, noting that expectations flipped from "slight pessimism to moderate optimism."

Operators have also survived worse. "The industry has already been through COVID, supply chain mayhem, and the worst labor market in decades," Milos Eric, general manager at OysterLink, told The Food Institute. "A drop in weekly spending doesn't concern operators that remain in business because they're already very adaptable."

The Consumer Reality

But CEO sentiment and consumer behavior are telling two very different stories.

The Conference Board's Consumer Confidence Index sat at 91.2 in February 2026, near some of its lowest levels in history. The University of Michigan Consumer Sentiment Index registered 56.6. In early March, Michigan's sentiment reading fell another 2% to the lowest level of the year, driven in part by concerns about gasoline prices following U.S. military action in Iran.

The spending data is unambiguous. Popmenu found that average weekly restaurant spending fell 22% in eight months, from $115 to $90. According to the NRA, 42% of restaurant operators were not profitable in 2025, and 60% reported that business conditions had deteriorated since 2024. At the start of 2026, Revenue Management Solutions measured industry traffic down nearly 2.5% year over year. Fiserv's February Small Business Index confirmed the trend, showing foot traffic falling 2.1% year over year.

Victor Fernandez, chief insights officer at Black Box Intelligence, put the industry's position bluntly in a February interview with Restaurant Dive: "Profitability and survival becomes a question, and it's a challenge when you see that sales are trending down." His firm measured four consecutive months of comparable sales and traffic declines as of November 2025. Only about one-third of the brands Black Box tracks posted positive comp sales in 2025, and even fewer achieved traffic growth.

BTIG analyst Peter Saleh captured the mood in his December 2025 forecast: "Restaurants are set for a humbling year."

The Price Hike Problem

Perhaps the most alarming data point in the Popmenu survey is what operators plan to do in response to pressure: 71% intend to raise menu prices in 2026, up from 57% the year before. The USDA's Economic Research Service forecasts food-away-from-home prices will rise 3.7% this year.

The problem is that consumers are explicitly telling operators that price increases are a deal-breaker. In Popmenu's consumer survey, 54% said raised menu prices would make them less likely to choose a restaurant. An equal 54% cited a lack of affordable meals or discounts as a reason to stay away. Forty-eight percent said small portions were a turn-off, and 51% pointed to poor online reviews where the restaurant did not respond.

On the flip side, what draws customers in is straightforward: 69% said value meals and discounts, 41% said loyalty rewards, and 32% said direct online ordering.

The math creates a vise. Operators facing 4% pre-tax margins and rising input costs feel they must raise prices. Consumers facing their own inflation pressures are saying they will eat out less if prices go up. The 71% of operators planning increases against the 54% of consumers who will leave over them is a collision course, not a strategy.

Where the Labor Problem Fits

The TD Bank survey identified another structural headwind: 54% of franchise leaders said a shrinking labor pool is their biggest challenge in attracting and retaining talent. This aligns with broader workforce data. Participants also cited tariffs, immigration reform, and interest rate uncertainty as factors shaping 2026.

Operators see technology as a partial answer. According to TD Bank's survey, 40% identified labor efficiency, training, and scheduling as the top area where AI could deliver meaningful improvement. Another 34% pointed to consumer data analysis and market trend predictions, and 28% cited customer experience and personalization.

But the NRA's data suggests the adoption runway is long. Its 2026 State of the Industry report found that while investment in restaurant technology is growing, pre-tax profit margins remain around 4%, leaving limited capital for the kind of AI and automation systems that could meaningfully reduce labor dependency.

Bryan Solar, chief product officer at SpotOn, framed the challenge for Restaurant Dive: "Figuring out how to manage costs in order to be profitable is going to happen at a clip that has not happened historically for restaurants. The ones who don't, unfortunately, I don't think they're going to be as successful."

Why Operators Stay Optimistic Anyway

The optimism is not irrational. It is partly structural. Restaurant operators are inherently forward-looking. They have fixed leases, sunk capital, and franchise obligations that make pessimism functionally useless. An operator who believed 2026 would be a disaster would sell or close, not answer a survey.

There is also a survivorship effect in the data. The 253 franchise leaders TD Bank surveyed at RFDC are, by definition, the ones who survived. The brands that Black Box tracks as posting negative comps are not represented at industry conferences. The 42% of operators who were unprofitable in 2025 are less likely to show up in an optimism survey.

Brandy Rand, VP of hospitality at Questex, offered a more generous reading: "People still are treating themselves and see dining out as a chance to socialize. The prevalent trend of more face-to-face interaction provides the hospitality industry an opportunity to deliver on consumer desire for social experiences."

That is true. But it does not change the spending data.

What the Winners Are Doing Differently

The brands bucking the downturn share common traits. Darden's four largest brands all exceeded Black Box's industry benchmark by more than 400 basis points in Q3, driven by what CEO Rick Cardenas described as teams being "brilliant with the basics." LongHorn Steakhouse cooks steaks to proper temperature "very close to 100% of the time," he said on Darden's March earnings call. The discipline is operational, not promotional.

The Popmenu data also reveals what operators plan to prioritize: 97% said they are sharpening focus on guest experience. Eighty-five percent are working to make their restaurants easier to find online. Eighty-seven percent are increasing marketing frequency and personalization. These are the right instincts.

But according to the same Popmenu study, only 35% of operators plan to add more affordable menu options, and 31% are considering variable pricing based on demand, time of day, or season. In a market where 68% of consumers told Popmenu they are pulling back on spending and 69% said value meals are what would bring them in, the gap between what customers want and what operators plan to offer remains wide.

The Bottom Line

The restaurant industry is not heading for collapse. The NRA's projected $1.55 trillion sector with 100,000 jobs being added does not vanish. But the confidence gap between operators and consumers is real, measurable, and growing. The NRA reported 12 consecutive months of net customer traffic decline heading into 2026. Only one-third of brands tracked by Black Box Intelligence posted positive comp sales last year. Consumer confidence sits near historical lows.

Operators planning to raise prices into a consumer pullback while banking on technology savings that have not yet materialized are building strategy on hope rather than evidence. The brands that will outperform in 2026 are the ones closing the gap between their optimism and their customers' reality, not by lowering expectations, but by earning the right to keep them.

Brendan Sweeney, CEO of Popmenu, summarized the situation: "Economic pressure is not letting up for restaurants who see costs continue to increase and consumer confidence plummet. Operators are actively seeking ways to gain an edge at every step of the guest journey."

The edge will come from listening to what consumers are actually saying, and building a business around the answer.