Operations

Inflation, labor and AI: 5 things fast casual operators need to know

Toast’s latest industry survey reveals why restaurant operators are still betting on growth despite rising costs and hiring challenges.

Photo: ChatGPT

August 26, 2026 by Cherryh Cansler — Publisher, FastCasual.com

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Fast casual operators heading into the back half of 2026 are dealing with a familiar mix of rising costs and hiring headaches — but a new industry survey suggests the segment is holding its ground rather than pulling back. Toast's annual Voice of the Restaurant Industry Survey, based on responses from 676 U.S. restaurant operators with 16 or fewer locations, paints a picture of an industry that's staying busy, leaning on technology, and betting on growth instead of cuts. As the report puts it, "restaurants are durable, and they're doubling down on being busy and effective to achieve their business goals."

Below are five takeaways fast casual operators should have on their radar.

1. Confidence hasn't cracked, even as costs climb

Despite inflation and staffing pressure intensifying, operator sentiment hasn't budged. Ninety-one percent of respondents rated their business as good or excellent — the same share as last year — and the majority described themselves as neutral to extremely comfortable with current market conditions. That resilience matters for fast casual brands in particular, a segment that has leaned heavily on throughput and value positioning to stay competitive with both quick service and full service.

2. Inflation and hiring are now the top two threats — and both got worse

For the first time, inflation has pulled ahead as operators' single biggest challenge, cited by 27% of respondents, up seven points year-over-year. Hiring wasn't far behind at 22%, up six points. Guest traffic, financial management, throughput, marketing and COGS analysis rounded out the list, but none moved nearly as sharply. For fast casual chains running tighter labor models than full-service concepts, the hiring jump is worth watching closely as it could squeeze the speed-of-service advantage the segment is built on.

3. Growth is the strategy, not the cutting board

Improving profitability remains operators' top goal (37%), but how they intend to get there has shifted. Rather than trimming staff or menus, operators are chasing new demand: 30% want to increase guest counts, and the fastest-growing goal — up six points to 27% — is adding new revenue streams like catering, retail or online ordering. Staffing plans echo that mindset. Only 3% of operators plan to cut headcount, while 49% still plan to hire and 48% plan to hold steady. For fast casual brands weighing catering programs, virtual kitchens or expanded online ordering, the data suggests peers are moving the same direction.

4. Menu prices are no longer the default lever against food costs

Operators are still willing to raise prices if food costs climb — 43% said they would — but that's down five points from last year. Instead, more operators are tightening inventory management (39%, up 12 points) and starting to track key ingredient prices more closely (33%, up four points) before touching the menu. For fast casual concepts, where value perception is a core part of the customer promise, that shift toward operational discipline over price hikes tracks with how sensitive the segment's guests are to sticker shock.

5. AI has moved from experiment to expectation

AI adoption is no longer a fringe conversation. Eighty-seven percent of operators say they're comfortable using AI, and 85% expect to use more of it going forward. Notably, most of that experimentation is happening through technology vendors rather than in-house: 42% of operators are testing AI solely through vendor partners, and another 25% are combining vendor tools with their own efforts. For fast casual operators evaluating AI-powered ordering, forecasting or labor scheduling tools, the message from peers is clear — vendor-delivered AI is the path most are already taking, not something they're waiting to figure out on their own.

The bottom line

Fast casual operators are facing real pressure on costs and labor in 2026, but the response isn't retreat. It's growth: more guests, more revenue channels, tighter operations and more technology. Operators who treat this year's headwinds as a reason to get more efficient — rather than smaller — appear to be in good company.

OperationsToast, Inc.

About Cherryh Cansler

Cherryh Cansler is Publisher of FastCasual.com and Vice President of Connect Food. She has been covering the restaurant industry since 2012. Her byline has appeared in Forbes, The Kansas City Star and American Fitness magazine, among many others.

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