Daisy Espinoza / Houston Public Media
Houstonians enjoying a Sunday brunch at a local restaurant in Montrose.
Texas restaurants are facing serious economic headwinds. According to data tracked by the National Restaurant Association, 50% of Texas restaurant operators failed to earn a profit in 2025.
“I think it speaks to the fact that high costs are hitting restaurants on both sides of their math equation,” said Kelsey Erickson Streufert, chief public affairs officer for the Texas Restaurant Association. “It means everything that comes into a restaurant that a restaurant needs to operate is significantly more expensive.”
Streufert said that food costs alone are up 35% since the pandemic. Labor and insurance costs have climbed over the past few years as well. Fast-rising credit card swipe fees have also compounded the issue.
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“Visa and MasterCard operate as a duopoly, and so they don’t face any competition, and they continue to raise their prices as a result, not only is that hurting our restaurants and local businesses, but ultimately those costs are passed on to consumers,” Streufert said, “and we know the average American family is paying between $1,200 and $1,800 a year due to these escalating costs.”
The rising costs restaurants themselves pay are only part of the problem they face. There’s also the matter of what happens when the businesses try to pass along any part of those expenses to their customers by raising the prices on their menus.
“Our customers are struggling with a lot of these same cost increases,” Streufert said. “And so they have less flexibility and, frankly, less money to spend at our restaurants.”
Streufert said there were some restaurant closures around the start of the year, though she did not have any statistics available to determine whether those amounted to an increase over previous years. She also noted that the start of the year is typically when troubled restaurants close their doors, after many try to hang on through the holiday season.
“I always hesitate to press the panic button, if you will, because restaurants are incredibly resilient,” Streufert said. “At the same time, there is the practical reality of this, that you can only run a business for so long and not be profitable, especially a business like a restaurant where they typically don’t have significant savings put aside.”