Why every restaurant needs a backup plan (thanks, AWS)
Plus: AI should enhance, not replace | What's hurting profitability
• public
The industry’s next challenge isn’t just survival—it’s learning how to deliver smarter, more efficient hospitality without losing the human touch that defines it.
Rising inflation, wage increases, and new tariffs are squeezing restaurant margins from every angle, while customers are becoming more price-sensitive than ever. At the same time, AI is reshaping operations—promising powerful tools for efficiency and cost-cutting, but also raising the risk of eroding the personal connections that make dining memorable.
But first, why inflation has turned a NYC egg sandwich into a $17 splurge.
Lady who lunches. Nancy Silverton is still the busiest not-a-chef in Los Angeles.
Flavor feed. Why chef-generated content offers a big boost to restaurant brands.
Swallowed whole. Fremont-based company buys Del Taco in $115M deal.
Wild robots. Waymo and DoorDash are teaming up to test out fully automated food deliveries.
Starstruck. Are Michelin stars now an economic must, not just a culinary honor?
Restaurateurs face “double squeeze” between tariffs and staffing costs
Expert Market’s 2025 Food and Beverage Report found that 76% of restaurant operators say ingredient costs are significantly hurting profitability, 62% have raised menu prices due to labor and 47% say tariffs directly increased pricing. Efficiency and tech adoption are the best ways to cope with rising costs.
Why it matters: For restaurant owners, the combined pressures of wage inflation and import/export tariffs are eroding margins from both inside and outside the business. To remain sustainable, operators must sharpen controls on labor scheduling, menu engineering, supply sourcing and embrace technology to maintain service levels while keeping costs manageable. (Modern Restaurant Management)
Internet outage caused chaos for restaurants
A major outage at Amazon Web Services (AWS) on Monday, Oct. 20 left thousands of restaurants unable to process mobile orders, loyalty rewards, delivery apps and point-of-sale systems including Toast and DoorDash. While the outage only lasted less than 24 hours, the disruption exposed how heavily restaurant operations rely on cloud infrastructure.
Why it matters: For restaurant owners, the outage underscores the risk of dependency on a single service provider for critical systems. Loss of mobile ordering, scheduling and payment capabilities can quickly lead to lost revenue and customer frustration. It’s a wake-up call to invest in redundancy, offline options and contingency plans to safeguard operations. (Nation's Restaurant News)
How restaurants can put service back into AI innovation
With the rise of AI-driven tools, restaurant owners have a variety of game-changing options now at their fingertips. However, that automation works best in certain service situations only. Using AI to enhance service in specific ways is your best bet versus replacing the human touch that defines the dining experience.
Why it matters: For restaurant owners, technology alone won’t guarantee guest loyalty: how you integrate AI with human service matters. Investing in tech that supports staff and guest experience can improve efficiency, accuracy and personalization without sacrificing warmth. That balance may become a competitive differentiator in the evolving hospitality landscape. (QSR Magazine)
17%
Percentage of restaurant franchises that ever reach 100 locations.
Domino's increasingly dominates the fast-food pizza market
Play old-school video games at this themed Philadelphia bar
Starbucks urged to restart union talks in NYC
After bankruptcy, this beloved chain is making a comeback
Philz Coffee rolls out new points-based loyalty program
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 Lesley McKenzie.