Weekly Wrap February 18: Menu Inflation, Restaurant Tech, and More

The National Restaurant Association’s 2025 State of the Industry report makes one thing clear: while operators see technology as a crucial investment, it’s no panacea for operational challenges, and can’t replace the traditional in-person restaurant experience.

According to the data presented in this report, technology investment in restaurants presents a somewhat contradictory double-edged sword. While the majority (83%) of operators say that the use of technology in a restaurant provides a competitive advantage, only 28% of operators say that investments in technology have improved their restaurant’s profitability.

Restaurant operators seem to be most likely to see a difference in productivity from investments in technology, rather than the overall experience of both employees and customers. Among operators that have invested more in technology over the last two to three years, 69% of operators say it made their operations more efficient and productive. However, only four in 10 operators say that technology has improved customer satisfaction, and only 30% of operators say it improved employee training.

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Operators’ and consumers’ responses to increased technology investment seem to dovetail with the growth of on-premises dining. While operators and analysts in 2020 seemed to think that the pandemic would signal the death of full-service dining, in 2025, operators are looking to boost on-premises experiences, even when balancing the demand for off-premises channels.

For example, while ghost kitchens were a significant trend four years ago, according to the report, only one in five operators thinks ghost kitchens will become common in their segment. On the consumer side, only 53% of limited-service customers say that technology availability factors into their decision to choose a quick-service restaurant, coffee shop, or snack place, as consumers look to restaurant technology to improve or augment their restaurant experience—not replace it.

Barboncino, a staple wood-fired pizzeria in Crown Heights that first opened in 2011, will close at the end of February. Co-owners Jesse Shapell and Emma Walton attributed the decision to close to financial strains, telling Eater in a statement:

“We came to Barboncino to restore its viability as a business and to ensure that it could last for years to come. But unfortunately, like so many other restaurants and bars that closed across NYC in the last year, Barboncino was not immune to the effects of rising costs and diminished sales. We are truly saddened, but will always remember Barboncino with love.”

In 2022, Walton and Shappell took over the Franklin Avenue restaurant from its original operator Ron Brown. A year later, workers formed Barboncino Workers United, a union with Workers United to fight for higher wages and worker protections. In 2023, one Barboncino employee told Eater: “Even at one of the best places to work, these things can happen to you and you’re in this very precarious position.” Another added: “What we are doing is not about Barboncino specifically as much as it is about the restaurant industry itself.”

The move was notable: at the time, making the establishment the only unionized pizzeria in New York City. Now, it represents the ongoing challenges of unionizing a single-location small restaurant versus workers at chains like Starbucks, which have gained more traction. Others at restaurants like Lodi in Rockefeller Center have tried without success.

Following an email sent out last week to employees about the impending closure, Barboncino Workers United wrote in a statement that: “Our community, one we have worked to preserve and improve, is being dismantled at the hands of absent owners that have repeatedly ignored our needs.” The statement pointed to the union’s desire for the restaurant to keep prices “manageable” instead of “pricing out the neighborhood locals who helped build the restaurant into what it is,” among other measures they postured to operators. Additionally, they claimed they had not seen wages rise since announcing a union drive with negotiations that they said were continuously stalled by the owners.

Since then, the Barboncino staff started a GoFundMe that, at the time of publishing, had raised more than $6,000. Barboncino’s last day is February 28.

Boston Mayor Michelle Wu has filed an ordinance with Boston’s city council that would require third-party food delivery services like Uber Eats, DoorDash and Grubhub to obtain a permit to operate in the city, Wu’s office said Monday.

In order to obtain a permit under the proposed law, aggregators would have to give the city proof that its delivery operators — including couriers who make deliveries on mopeds, electric scooters and motorcycles — have liability insurance. The delivery companies would also be required to “share aggregate data on delivery trips.”

Small businesses with a small number of delivery workers, and delivery firms like UPS, FedEx and Amazon, would be exempt from the ordinance, Wu’s office said.

 Wu framed the ordinance as a way to disincentivize risky driving during deliveries. 

The Mayor’s office said such legislation was necessitated by an increase in complaints about traffic and congestion; illegal double parking; and reckless and unsafe delivery drivers on scooters, mopeds, motorbikes and e-bikes over the past year. The policy is intended to provide insurance for un- and underinsured delivery workers.

The proposed law will have to pass through Boston’s legislative process before it becomes law. It would be a step toward “making app deliveries safer for our city’s pedestrians and drivers on our streets, and toward ensuring delivery app drivers have insurance coverage from the large, national companies they work for,” Wu said in a statement.

Jascha Franklin-Hodge, Boston’s chief of streets, said “we hope to create an incentive for these companies to encourage safer driving instead of the current incentive–speed at all costs.”

Restaurant delivery firms have already signaled political opposition. A DoorDash spokesperson indicated the company disagreed with the thrust of the law, claiming it would not meaningfully improve the safety of delivery drivers or the general public. DoorDash also claims the ordinance would raise costs, which firms would pass on to consumers as price hikes.

Restaurant menu prices rose 0.2% in January, according to new federal data released on Wednesday, continuing a period of easing inflation for an industry struggling to get customer count growth. 

Menu price inflation last month was less than half the rate of the price hikes seen at grocery stores and other retailers. Food at home prices last month rose 0.5% compared with December, according to data from the U.S. Bureau of Labor Statistics. 

To be sure, supermarket inflation remains much lower than restaurant menu price inflation when compared to a year ago. 

Food at home prices over the past year were up 1.9%. At restaurants, prices were up 3.4%. Prices at both limited-service and full-service restaurants were up 3.3% over the past year. 

But the data could suggest a shift in inflation back to grocery stores that at the very least could give consumers less reason to eat at home.

Restaurant menu prices rose at a much faster rate than grocers in late 2023 and for most of 2024, as operators fought higher labor and food costs and grocers kept prices largely frozen. Wide gaps in inflation between the two were cited as a key reason for weak restaurant traffic.

President Donald Trump reportedly said he would be instituting 25% tariffs on foreign steel and aluminum, a move that some fear will change the equation for restaurants looking to expand.

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Canada is the biggest foreign supplier of steel and aluminum to the U.S., and the once-friendly ally has already announced plans to retaliate against Trump’s proposed tariffs last week. Canadian Prime Minister Justin Trudeau pledged to slap a 25% tariff on American goods flowing into Canada, from beer and wine, to fruits and vegetables, beef, pork and dairy. 

And more tariff-related news is coming later this week. Trump also said he planned to move forward with “reciprocal tariffs,” which would raise U.S. tariffs to match those of other countries. 

What this could mean for the restaurant industry remains unclear.

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Trump has argued that tariffs will eliminate a trade imbalance, but many economists argue the result will be higher prices for American consumers.

Michael Benson, president of the Southern California Restaurant Design Group, based in Encinitas, California, said tariffs on steel and aluminum would likely be a setback for restaurant development—and it comes just as inflation on equipment had begun to ease after a post-Covid spike.

After Covid, supply chain challenges slowed restaurant expansion and contributed to higher costs. 

“What tariffs will do is very much the same effect,” said Benson. “It will also impact the supply chain if many manufacturers have to change the companies they’re buying metal from.”

Benson—whose company works with both restaurant chains, like Habit Burger, Café Rio and Starbird, as well as independents, hotels and foodservice contractors—said the restaurant community in Los Angeles, in particular, will likely be hit hard by tariffs after fires across the city wiped out large neighborhoods last month.

“In Los Angeles, a lot of the restaurants that burned down will not get the type of money from insurance that they’ll need to rebuild, and, with this, there will be a double whammy where it will either slow down the process of rebuilding, or I think a lot of restaurant owners will walk away,” he said. “This is not good news for the restaurant industry as a whole.”