A new survey illustrates that AI is becoming a game-changer for the foodservice industry. In its 2026 State of the Restaurant Industry: Mid-Year Report, the Restaurant365 management platform uncovered a notable difference in performance between restaurants using AI and those that are averse to the technology.
Drawing upon survey responses from more than 420 restaurant operators, Restaurant365 found that 62% of those using AI for back-office functions reported reduced labor costs.
“The real eye-opener is what we’re calling the ‘restaurant profitability gap,’” Restaurant365 executive Steve Demchuk told The Food Institute. “Back-office AI adoption has more than doubled since January, and the operators using it are reporting meaningfully better outcomes.”
Operators using AI experienced stronger results across key profitability drivers such as food costs and operational efficiency. More specifically, among the restaurant leaders actively using AI:
- 61% report reduced food costs
- 88% report saving time each week
- Nearly 33% report cost reductions of 6% or more
How are Restaurants Faring in 2026?
Rather than relying primarily on menu price increases during this period of persistent inflation, many operators are improving margins through better operational execution and, increasingly, AI-enabled decision-making.
Operators are becoming less reliant on menu price increases to protect margins. Just 52% increased menu prices in response to food inflation, as more restaurants turn to inventory management, waste reduction, and supplier optimization.
Restaurant365’s findings also noted encouraging news in terms of traffic.
“Guest traffic is recovering faster than expected,” said Demchuk, Restaurant365’s chief product officer. “At the start of the year, only 28 percent of operators reported traffic gains. By mid-year, that number had climbed to 46 percent, and 62 percent expect growth in the back half.
“The story of the second half of 2026: returning traffic will lift everyone’s sales, but it won’t lift everyone’s profitability equally,” Demchuk added. “The operators who turn their data into faster, smarter decisions will convert that traffic into margin, and the distance between them and everyone else is widening in real time.”
AI’s Barriers to Entry
The survey found that, for operators not yet adopting AI, the top barrier remains data privacy (37%), followed by confidence in output accuracy (34%), implementation cost (29%), and uncertainty about where to begin (18%).
“Every major shift in our industry creates a new line separating leaders from everyone else,” stated Tony Smith, Restaurant365’s CEO. “Our research suggests that the operators who are consistently pulling ahead aren’t simply adopting AI, they’re using it to make faster, better decisions every day.
“That’s translating into lower costs, improved efficiency, and stronger financial outcomes.”
Food for Thought Leadership
In this episode of Food for Thought Leadership, FI VP of Content and Insights Chris Campbell sits down with FI CEO and Managing Partner Brian Choi to examine the growing disconnect between economic headlines and the reality facing consumers and food businesses. The discussion explores why declining gasoline prices and moderating CPI figures fail to capture persistent food inflation, weakening consumer sentiment, and the financial pressures driving more Americans to rely on debt to purchase groceries.
