Major Chains Streamline Menus to Counter Inflation and Tariffs
New York, Tuesday, 16 December 2025.
Facing a 33% surge in dining costs since 2020, chains are treating kitchens like factories; Applebee’s slashed its menu to 105 items to offset tariffs and sustain volume.
The Manufacturing Mindset
As of December 16, 2025, the restaurant industry is undergoing a fundamental operational shift, moving away from traditional hospitality models toward rigid efficiency. Stephen Zagor, a restaurant industry expert at Columbia Business School, argues that regardless of culinary prestige, every food establishment must now view itself as a manufacturing business to survive. Success in this high-cost environment relies heavily on repetition, standardization, and the strict limitation of waste [1]. This pivot is a direct response to soaring operating expenses; since 2020, the cost of dining out has risen by 33%, while grocery prices have climbed 29% [1]. Furthermore, wholesale food costs have increased by nearly 5% over the last year alone, squeezing margins further [2].
Streamlining for Survival
Major chains are aggressively simplifying their offerings to protect profitability without alienating price-sensitive diners. Applebee’s, for instance, has reduced its menu to 105 items, a significant decrease from the 135 to 140 items offered prior to the pandemic [1]. John Peyton, CEO of Applebee’s parent company Dine Brands, notes that this reduction enhances operational simplicity and focuses on high-yielding items [1]. However, consumers are still feeling the pinch; Applebee’s “All You Can Eat” menu, priced at $12.99 in 2022, has risen to $15.99 in 2025, representing a jump of 23.095 percent [1]. To manage these shifts, chains are leveraging data from distributors like Sysco to analyze menu profitability and substitute expensive ingredients, such as swapping beef for chicken, to mitigate the impact of tariffs [1].
Divergent Fortunes: Chains vs. Independents
While independent operators struggle, some large-scale chains are successfully bucking industry downturns through scale and nostalgia-driven marketing. In the fourth quarter of fiscal 2025, Texas Roadhouse reported a 12.8% year-over-year increase in sales, totaling $1.4 billion, while Brinker International, the parent company of Chili’s, saw sales surge by 21% to $1.45 billion [3]. Conversely, smaller markets are facing a wave of closures due to the “unaffordability crisis.” In Milwaukee, established venues like The National Cafe closed its doors on December 12, 2025, and Beans & Barley is set to close in January [4]. Independent owners cite a 35% increase in food and labor costs over the past five years as a primary driver for these closures, with many unable to raise prices sufficiently to cover expenses without losing customers [4].
Tariff Pressures and Legislative Relief
The economic strain is compounded by trade policies, with 60% of restaurants reporting in October 2025 that they were directly affected by U.S. tariffs [2]. The impact extends beyond food plates to beverage programs; wine producers are grappling with retaliatory tariffs and rising costs for imported materials [5]. In response, Rep. Mike Thompson and the Congressional Wine Caucus introduced the Specialty Crop & Wine Producer Tariff Relief Act in December 2025 [5]. This bipartisan bill aims to supplement the Trump administration’s $12 billion aid package—which currently designates $11 billion primarily for row-crop producers—by providing targeted financial assistance to specialty crop growers and winemakers facing tariff-related losses [5].