• by Teresa Buyikian , Yesterday

Restaurant operators utilizing AI are finally seeing the benefits across multiple key profitability drivers, per a new report from tech platform Restaurant365. 

The "2026 State of the Restaurant Industry Mid-Year Report" found operators that have embraced AI are actually seeing measurable differences across food and labor costs, as well as operational efficiency.

Of the of operators currently using AI in at least one back-office function (62%), 61% said they have seen reduced food costs since implementation.

Sixty-two percent of them also saw reduced labor costs, while 88% reported AI was “saving time every week.”

Nearly a third said AI helped reduce costs by at least 6%. 

“Our research suggests that the operators who are consistently pulling ahead aren't simply adopting AI, they're using it to make faster, better decisions every day,” said Tony Smith, CEO of Restaurant365. “That's translating into lower costs, improved efficiency and stronger financial outcomes.”

For those yet to adopt AI, the barriers to entry are still significant.

More than a third (37%) not yet using AI cite data privacy and security concerns, while 34% mentioned output accuracy (34%), implementation cost (29%) and uncertainty about where to begin (18%) as roadblocks. 

The report also found that despite ever present cost pressures, operators are increasingly more optimistic looking at the second half of the year.

Labor costs increased in the first six months of 2026 for 75% of operators, but only 59% expected labor costs to continue rising through the end of the year.

And while food costs increased this year for 83% of respondents, only 52% increased menu prices in response, down from 66% at the beginning of the year. 

Customer traffic has also fared better this year than previously expected.

Only 28% of operators said at the beginning of the year their guest traffic had increased over 2025 numbers, but since then traffic has actually increased to 46% at mid-year.

Looking ahead, 62% expect traffic to continue to increase during the second half of 2026. 

The mid-year report was compiled from responses from over 420 restaurant operators representing approximately 10,000 U.S. restaurant locations across QSR, fast casual, casual dining, fine dining, pizza and coffee concepts.