By Waylon Cunningham
NEW YORK, Feb 27 (Reuters) – On paper, American consumers spent last year tightening their belts, and even retail heavyweights stumbled. But sit-down restaurants and some drive-through chains buzzed with patrons seeking a special treat or cheap comfort food.
Their upbeat sales made the U.S. restaurant industry a rare bright spot for jobs, with restaurant payrolls ticking up 1% last year, adding about 108,000 jobs, according to the Bureau of Labor Statistics.
In contrast, the overall U.S. economy added 181,000 non-farm jobs in 2025, marking the weakest annual payroll growth in 20 years outside a recession year.
Success among restaurants was not evenly spread, though.
Corporate filings show that eateries such as Brinker’s Chili’s, Yum Brands’ Taco Bell and fast-growing coffee chain Dutch Bros lured customers by aggressively marketing bundled deals, leaning into digital innovation and limited-time offers, and focusing on high-margin, Instagrammable food.
But previous darlings like Chipotle and Cava were hurt by what analysts call the “slop-bowl fatigue” – growing weariness among younger consumers with high-priced, customizable grain or salad bowls.
Tempe, Arizona-based Dutch Bros and its franchisees added roughly 8,000 employees in the last two years, a 33% increase, the company said.
“We have a healthy pipeline of growth,” CEO Christine Barone told Reuters after the company’s earnings in February. The brand, which serves customizable beverages, is a hit with younger consumers, Barone said.
A similar story is playing out at another chain that, like Dutch Bros, sells more treats than meals.
Ice cream chain Whit’s Frozen Custard has grown its payroll by up to 40% a year for the past two years, said owner Bill Aseere, to keep up with rapid growth. It now has stores in 93 locations across 10 states and some 15 to 20 employees per store.
Amanda Wang, co-founder of fast-growing Chinese beverage chain Ningji Lemon Tea – part of a tidal wave of Chinese tea brands coming to the U.S. – said her chain’s new restaurants in the U.S. were buoyed by demand among price-weary consumers for affordable indulgences.
Tea “offers that little bit of happiness,” she said.
As a whole, the restaurant industry grew payrolls even as it weathers depressed traffic and rising labor costs, analysts say, thanks in part to menu price increases. Menu prices at restaurants grew 4.1% in 2025 compared to grocery inflation of 2.3%, according to the Federal Reserve Bank of St. Louis.
DIVERGING FORTUNES
A deeper look at 2025 payroll data shows the difference in fortunes between types of restaurants: staff headcount at snack and non-alcoholic beverage restaurants grew 3.6% in 2025 and those at sit-down restaurants rose 1%. But fast-food payrolls grew only 0.4%, while cafeterias and buffet payrolls shrank 3.9%.
“At the end of the day, people want go out to eat and celebrate those big occasions,” said Chad Moutray, an economist at the National Restaurant Association, referring to resilient spending at sit-down restaurants.
“Consumers might be pulling back from vacations, but they still prioritize eating out.”
The payroll data and Moutray’s comments underscore what the industry calls the “lipstick effect” – consumers tightened their budgets, canceling expensive trips and postponing big-ticket purchases, but treated themselves to an indulgent meal, coffee or dessert.
Brinker’s reported 23% growth in its hourly restaurant staff between fiscal years 2024 and 2025, according to SEC filings, though it indicated that a growing share of its employees were part-time.
Darden, the parent company of sit-down restaurants like Olive Garden and LongHorn Steakhouse, increased staff for fiscal 2025 by about 3.8%.
Most national restaurant chains are franchised and do not report total employment figures among franchisees, but Chipotle and Starbucks, which operate the majority of their own stores, reported slight declines in total headcount for fiscal year 2025.
While cascades of tariff announcements have forced other industries to raise prices and reroute sourcing, restaurant owners have only faced the tariffs impacting narrow categories like cup packaging and Chinese Sichuan peppers.
(Reporting by Waylon Cunningham; Editing by Sayantani Ghosh and Nick Zieminski)
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