U.S. restaurant operators who have faced various economic pressures all year long are now dealing with complications arising from the U.S. government shutdown.
An extended government shutdown creates “needless economic uncertainty for millions of working families, which impacts how much they can support local small businesses,” National Restaurant Association (NRA) President and CEO Michelle Korsmo told SeafoodSource.
The small businesses that comprise the U.S. restaurant industry contribute more than USD 1 trillion (EUR 861 billion) annually to the U.S. economy, Korsmo added, and return 96 percent of that total to its workers, food producers, and “the many small businesses that enable us to keep our doors open.”
“America deserves better. The NRA urges lawmakers to quickly pass a clean [Continuing Resolution] and to pass a long-term budget that provides certainty for consumers,” Korsmo said.
The shutdown comes as U.S. restaurants have already been dealing with increased labor costs and tariff pressures.
According to Expert Market’s Food & Beverage Industry Report 2025, more than 85 percent of the 628 U.S. food and beverage professionals surveyed said labor issues are affecting their operations, and 38 percent said staffing, which includes recruitment, retention, and training, is their most significant challenge.
Additionally, 60 percent of restaurants report they have been directly affected by U.S. tariffs on imports.
“Ingredients are the big profitability threat; 76 percent say rising ingredient costs significantly impact profitability,” Expert Markets said.
In August, the NRA joined retail industry industry groups in highlighting the negative effects tariffs were likely to have on the industry.
“Operating a restaurant is becoming increasingly difficult due to economic and regulatory pressure and a nearly 5 percent increase in wholesale food costs since last year,” Korsmo said at the time. ”These new tariffs on food and beverage items will exacerbate the situation. With restaurants operating on very tight margins, many operators may have no choice but to increase menu prices – something they are reluctant to do because we know Americans may have to make the choice to dine out less frequently if prices go up.”
Since then, restaurants have had to do just that but to a limited degree so far.
Menu prices are up 3.9 percent year over year, according to the NRA, citing the U.S. Bureau of Labor Statistics’ Consumer Price Index.
“While menu inflation remains firm, it is well below the 8.8 percent peak in March 2023, which marked the fastest pace in over two decades,” the organization stated.
In addition to increased supply chain and labor costs, restaurants have been steadily losing business to grocery stores, as Americans cook from home more amid economic pressures and, therefore, turn toward grocery stores for restaurant-style meals.
In fact, Americans are increasingly choosing deli-prepared foods in place of restaurant meals, FMI – The Food Industry Association said in its new "The Power of Foodservice at Retail 2025" report.
The share of consumers choosing prepared meals at grocery stores soared from 12 percent in 2017 to 28 percent in 2025, the report found.
Over 50 percent of consumers also take a hybrid approach to creating meals, combining deli-prepared options with items from their own kitchen.
“Consumers are increasingly viewing deli-prepared foods as a true alternative to restaurant dining – not just a convenient option,” FMI Senior Manager of Research and Insights Allison Febrey said in a release. “This shift reflects how shoppers are redefining value in food: They want meals that deliver on quality and variety but also save time and money.”
In addition to utilizing grocery delis for meals, more Americans are purchasing foods for parties and events at grocery stores. Sales by value of deli entertaining products, such as food trays, inclined 4.4 percent in the first half of 2025, 210 Analytics Principal Anne-Marie Roerink said during a recent MSD Animal Health webinar, citing Circana data.
Seafood trays performed even better, with sales by value spiking 59 percent and sales by volume soaring 30 percent for the first six months of 2025 compared to the same six months of 2024.
