Texas restaurant owners are feeling the squeeze even as the national industry reports record sales. Data from RestaurantData shows that 1,039 restaurant locations across the state closed between January and June 2026, the highest raw total of any state. The Dallas‑Fort Worth metro area contributed roughly 240 of those closures.
Higher sales, lower profitability
The National Restaurant Association projects $1.55 trillion in industry sales for 2026, yet 42 % of operators said their restaurants were not profitable in 2025. The association’s 2026 report found that more than seven in ten consumers would eat out more often if they had additional disposable income, indicating that current spending is being driven by necessity rather than choice.
Rising costs drive closures
Food costs remain well above pre‑pandemic levels. The association reported in March 2026 that ingredient prices were about 34 % higher than in 2019, with later analyses suggesting the increase may be as high as 38 %. Labor costs have also climbed. Although Texas’ statutory minimum wage stays at $7.25 per hour, many employers pay above that rate to attract staff. In May 2025, food‑preparation and serving workers in Dallas‑Fort Worth earned an average of $15.74 per hour, while food‑service managers made $33.89 per hour.
Employment still below pre‑pandemic levels
Full‑service restaurants lost nearly 3.7 million jobs during the first two months of the pandemic, and as of June 2026 the sector remains about 183 000 jobs short of its pre‑pandemic headcount. The Texas Restaurant Association notes the state supports over 1.4 million industry jobs and generates roughly $137.8 billion in annual sales, underscoring the broader economic impact of restaurant closures.
Types of closures and local impact
RestaurantData cautions that its figures count location closures, not bankruptcies. Closures can result from expiring leases, relocations, ownership changes, concept conversions or corporate restructuring. Quick‑service establishments accounted for 51.5 % of classified closures in the first half of 2026, though raw totals do not reflect category‑specific failure rates.
Local coverage highlighted the Chapter 11 filing of Salad and Go, which operated more than 40 Dallas‑Fort Worth locations before closing its remaining restaurants on August 5, 2026. The chain cited declining consumer demand, rising operating costs and rapid expansion challenges as reasons for the shutdown.
Consumer behavior shifts
Even as closures rise, off‑premises dining continues to grow. A 2025 National Restaurant Association study found that nearly three‑quarters of all restaurant orders are now placed for drive‑thru, takeout, curbside pickup or delivery. At full‑service restaurants, the share of off‑site orders rose from 19 % in 2019 to 30 % in 2024, while limited‑service venues saw an increase from 76 % to 83 % over the same period.
Higher‑income diners are still spending on private dining, catering and premium experiences, suggesting a widening market divide. Budget‑conscious customers are gravitating toward discounts, loyalty programs and convenient, value‑focused menus.
Looking ahead
Industry analysts predict the “restaurant of the future” will feature smaller footprints, greater digital ordering, tighter menus, more automation and diversified revenue streams. Full‑service establishments will need to emphasize experiences that cannot be replicated at home, while quick‑service operators will compete on speed, convenience, loyalty benefits and price.
For Texas restaurateurs, navigating higher ingredient and labor costs while meeting evolving consumer preferences will be critical to staying open in a market where over a thousand locations have already closed this year.
Original reporting: The Dallas Express — read the source article.
