In this Weekly Wrap, we’re looking at how restaurants are dealing with tariff-related costs this holiday season, minimum wage increases in 2026, ‘review bombing,’ and more.
Dealing with Costs During the Holidays
The Headline: “How restaurants are navigating tariff-related costs this holiday season”
The Source: Restaurant Dive
What You Need to Know:
Some large operators were able to stockpile their imported food inventory before the tariffs took effect, but smaller restaurants are taking a financial hit or are trying to substitute those items with domestically produced ingredients or other non-tariffed options, Zagor said.
Food production and distribution have also been impacted by the Trump administration’s immigration crackdowns, as both sector’s labor forces rely heavily on immigrant workers, said Tuttle.
The deportation operations have impacted undocumented immigrants as well as documented temporary workers and permanent residents who are facing “trepidation in employment,” he said. That’s had an impact on restaurant staffing levels as well, he said.
Crafting price-sensitive menus
Italian and Mediterranean full-service operators that stake their identity on serving imported olive oil, cheeses, wines and seafood have tried to find ways to lower costs, such swapping European wines with American bottles, while marketing the substitution as an “inflation busting special,” said Zagor.
Others have had to replace most or all of their imported cheeses with domestic ones, or replaced higher-priced steaks, veal and imported fish menu items with pork, chicken and pasta dishes, he said.
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To help chip away at the lost revenue, operators are reducing portion sizes or adding inexpensive sides to keep the value perception of their offerings high, said Camac.
Some are also offering holiday prix-fixe menus since “it’s easier to hide food costs inside a neat three-course bundle than on an à la carte menu where guests can do math,” Zagor said.
Restaurants have been simplifying their menus with better value options that come with smaller portions, said Benji Bahena, research analyst at Euromonitor International.
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Restaurants may “load up for weekends and the holidays, cut back on the early weekdays, and pray that no one calls out on New Year’s Eve, when the restaurant is one reservation away from combustion,” Zagor said.
Operators should focus on retention and hiring good management at the location level, while keeping an eye on new entrants to the labor market as the economy softens and other industries reduce employee headcounts, said Tuttle. Those dynamics could create opportunities to hire professionals that are outside of the foodservice industry, he said.
Our Take:
These are some solid plays out of the 2025 and 2026 playbook.
You can be sure that 2026 will include the same challenges and pressures that 2025 had. Policy will continue to create uncertainty on all fronts, except in the unlikely case that the Supreme Court intervenes and puts a stop to certain policies.
In the coming year, we can expect tariffs to continue to dominate pricing and inflation conversations. Given the tactics used in immigration enforcement, we can expect continued stress on the labor market, not only for restaurants but also across the food chain and the construction sector, which heavily affects the cost and speed of buildouts.
The depressing and contradictory bright spot is that as the economy softens, there will be new entrants into the job market. We saw this during the 2008 housing crash, when an influx of white collar professionals jumped into the hospitality sector due to loss of work in other sectors.
On the whole, many of the tactics in the article are practical and should be part of any operator’s playbook in good times or bad.
New Year Wage Increases
The Headline: “The new year will bring minimum wage increases in 19 states”
The Source: Restaurant Business Online
What You Need to Know:
Nineteen states will see a wage bump on Jan. 1, 2026. And, for the first time, there will be more states with a minimum wage at or above $15 per hour than states adhering to the federal minimum of $7.25, according to the liberal-leaning Economic Policy Institute.
In the new year, Arizona, Colorado, Hawaii, Maine, Missouri and Nebraska will cross the $15 per hour threshold for the first time.
Among the highest rates will be in Washington state, for example, where the minimum wage is set to increase to $17.13 per hour, from the current $16.66.
Connecticut will raise its wage to $16.94 from $16.35 per hour. And California’s minimum wage will step up to $16.90 from $16.50 per hour.
The District of Columbia has the highest minimum wage, however, with a rate of $17.95 per hour, which took effect in July. D.C. doesn’t have another inflation-adjusted increase scheduled until July 2026.
There, labor advocates are campaigning for a ballot initiative in November that would raise the minimum wage to $25 per hour and eliminate the tip credit.
And California, of course, has a statewide minimum wage for fast-food workers at $20 per hour, which could also be increased in 2026 to adjust for inflation—though the council tasked with setting that wage has fallen dormant as it waits for the appointment of a new chair.
Our Take:
I’m honestly surprised that some of these wage hikes have not happened earlier. Most operators who care about retention already pay higher than minimum wage to their back of house employees. Good BOH staff is always hard to find, and paying a few dollars more will generally save you money in the long run through better retention. Constantly training new employees is expensive, and this helps alleviate some of that turnover.
As it pertains to tip credit FOH employees, these hikes will have minimal impact. Most employers will continue to utilize the tip credit. It simply makes sense and in many cases keeps businesses afloat. It is a touchy subject, and there is a large contingent of labor advocates who support abolishing the tip credit. I admit it is not a perfect system, but unless there is a drastic change in culture and pricing models, moving the entire country away from it would have a catastrophic impact on the industry.
That is not to say the restaurant industry would not survive. But there would be major attrition, and service styles and standards would change significantly and in some cases be diminished. The idea of hospitality and expectations of service would simply not be the same.
Review Bombing
The Headline: “Restaurants sound the alarm over 'review bombing'”
The Source: Restaurant Business Online
What You Need to Know:
The COO of Chicago-based Protein Bar & Kitchen gets notified whenever one of the chain’s 14 restaurants gets a customer review on Google. The reviews started coming in fast and furious on Halloween, and they weren’t good.
“We don’t get very many [bad reviews], so when we do, we notice them,” Cohen said. “Notifications kept coming in, one-star reviews, and after two or three, it became obvious that, ‘Oh no, something is definitely wrong here.’”
The reviews were all similar. They were written in broken English, and the content was bizarre, with references to rooms and beds rather than food. After about 15 reviews, one of them said, “I can make all these go away. Just contact me.”
“That’s when we all started to realize, oh, we’re the victim of this extortion scam,” Cohen said.
It’s a tactic known as review bombing, in which fraudsters flood a restaurant with negative reviews and then ask for payment to get them to stop.
It’s not clear how common these attacks are. According to the National Restaurant Association, there hasn’t been an uptick in review extortion recently, though fraudulent reviews are now “a pretty standard way to react to something a restaurant does” outside of the dining experience itself, wrote Vanessa Sink, director of media relations for the association, in an email.
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Though it would be fairly obvious to even the casual observer that the reviews are fake, they can still have a real impact, because restaurants’ Google ratings have become so influential on customers’ dining decisions.
If a restaurant has a poor rating (typically under 4, McGowan said) users might look elsewhere—that is, if Google’s algorithm even surfaces the restaurant at all.
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That’s because Google recently took steps to crack down on review extortion schemes. Operators who suspect they’re dealing with a review bomb can now fill out a Merchant Extortion form to elevate the issue with Google and hopefully get the reviews taken down.
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The new form is not the only safeguard Google has against fake reviews. It also uses AI to monitor for suspicious activity and automatically remove content that violates its policies. This system blocked or removed more than 240 million reviews last year, most of which were stopped before they were even seen, the company said.
Our Take:
Thank god someone is not only talking about this but actually doing something about it. I still feel that Google’s efforts are not enough. Three years ago we received our first extortion review. We were hit with a few bad reviews, and when we reached out to the reviewer they attempted to extort money in exchange for changing the review. Even with clear evidence that the reviews were fraudulent, it still took close to a month to get them taken down.
I could go on for days about how I feel about online review platforms and the fraudsters who abuse them. And let’s be clear, it is not just extortionists. It is jaded customers as well. A guest who is upset because you gave away their table after they were an hour late. A guest who is mad because you did not allow their non service animal German Shepherd to dine inside. Or someone who is angry that their girlfriend dumped them and then leaves a bad review of her workplace, naming her, in hopes of getting her fired.
These may sound like extreme examples, but they are all things that have happened in real life. Most people can read through these reviews for what they are, but as this article points out, the algorithm cannot. It does not discern context. It simply reads the rating, and if that rating drops low enough, you will not even appear when someone searches food near me. That is where the real danger lies and where these platforms need to get better.
While I applaud the efforts to combat extortion, more needs to be done. I do not have a perfect solution, but these platforms employ some very smart programmers and increasingly powerful AI. I am pretty sure someone could come up with something innovative to help alleviate the issue, that is if they actually want to.