The two-speed restaurant economy

We're living in a treat economy—despite financial challenges, consumers are still spending on small indulgences. Whether it's dinner out, coffee or dessert, consumer desire for moments of joy creates pockets of opportunity for operators who can staff smartly and capture demand. At the same time, reputation has never mattered more. A disciplined Google review strategy isn’t optional; it’s frontline marketing. Growth is possible—but only for restaurants that pair operational discipline with brand vigilance.

But first, restaurants in a blizzard face an impossible decision: close down (and face collapse) or stay open?

Right this way. AMEX is upgrading Resy to win the reservations war once and for all

Medal of Honor. The 2026 James Beard America's Classics winners have been announced

New contender. Look out OpenTable, DoorDash has entered the reservations fray

Margin boost. How Shake Shake improved profits despite soaring beef costs

Follow suit. GrubHub agrees to pay a $5 mil lawsuit over misleading fees

The restaurant industry was a rare place of job growth in 2025

The U.S. restaurant industry was a rare bright spot for job growth in 2025, adding about 108,000 positions—about 1% of payrolls—even as overall employment expanded modestly. Consumers sought affordable indulgences like sit-down meals, coffee and ice cream, boosting hiring especially at sit-down and beverage-focused eateries.

Why it matters: For restaurant owners, this highlights resilience amid broader labor softness: dining experiences and affordable treats still draw guests. Staffing increases suggest opportunities to expand service and capture demand, especially in sit-down and beverage operators. Understanding what consumers are willing to spend on can help guide hiring, menu planning and growth strategies. (New York Post)

Why every restaurant needs a Google review response strategy

Are negative Google reviews ruining your business? You need a strategy. Responding thoughtfully to both positive and negative feedback shows care, improves search visibility and strengthens online reputation. Restaurants without a review response strategy risk losing control of the narrative and turning guests away based on unanswered concerns.

Why it matters: For restaurant owners, review responses are frontline reputation management. Thoughtful engagement can increase bookings, elevate SEO rankings and convert hesitant diners. A strategic response plan also signals accountability to current and future guests, reinforces brand voice and can turn negative experiences into loyalty opportunities—making it a critical, low-cost tool for competitive differentiation. (Modern Restaurant Management)

How the K-shaped economy is rewriting the rules for restaurants

A “K-shaped economy” describes how restaurant spending is diverging: some diners still splurge on cocktails and special occasions, while others trade down, skip add-ons or hunt deals. Independent operators often see solid covers but weak cash flow as high labor and food costs outpace what many guests are willing to spend.

Why it matters: For restaurant owners, a K-shaped spending pattern means tuning your concept to capture both sides—value-hunters and experience-seekers. Strategic pricing, targeted promotions and menu mixes that appeal to diverse diners can help stabilize traffic and margins in an uneven economic environment where broad demand can’t be assumed. (Nation’s Restaurant News)

42%

The percentage of U.S. restaurants that did not turn a profit last year. (National Restaurant Association via WTOP)

Thanks for reading today's edition! You can reach the newsletter team at editor@theprep.co. We enjoy hearing from you.

Interested in advertising? Email us at newslettersales@mvfglobal.com

Was this email forwarded to you? Sign up here to get this newsletter once a week.

The Prep is written by Kelly Dobkin and edited by Biana Prieto