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I followed one dollar through a restaurant

About five cents of every dollar you pay for dinner used to be profit. I went to find out where the rest goes.

Issue 07 · Follow the DollarBy TheaNov 20263 min read

We’re making a short video about where your money goes when you pay for dinner, so I went looking for the real numbers. I expected the answer to be boring. Turns out it wasn’t.

I used figures from the National Restaurant Association, as they publish what an average US restaurant spends, not what one place says on Instagram.

Before the pandemic, out of every dollar you paid, roughly 33 cents went on food and another 33 cents on the people cooking and serving it. About 29 cents covered everything else: rent, energy, card fees, repairs, the dishwasher that always breaks on a Saturday. That left about 5 cents as profit, before tax.

Where one dollar went, before the pandemic

33¢Food
33¢Staff
29¢Everything else
5¢Profit
Average US restaurant, share of each dollar of sales, pre-tax, rounded. Source: National Restaurant Association, July 2026.

Five cents. Out of a whole dollar.

It means a restaurant that sells a $20 pasta keeps about a dollar of it. If one case of tomatoes goes up and nobody notices, that dollar can disappear without anyone in the room noticing.

A $20 pasta$20
→
Kept as profit~$1
At a pre-tax margin of about 5%, the pre-pandemic average.

Then I looked at what changed. Wholesale food prices are up 35% on pre-pandemic levels. Average hourly pay for restaurant staff is up 41%. The NRA puts the rise in total costs for an average restaurant at 36% between 2019 and 2026. Menu prices went up too, by 36% between February 2020 and May 2026, but that’s an average across the whole country. It doesn’t tell you which menus kept up and which didn’t.

What changed

Wholesale food prices+35%
Hourly pay for staff+41%
Total restaurant costs+36%
Menu prices+36%
Sources: National Restaurant Association, July 2026; menu prices February 2020 to May 2026, Bureau of Labor Statistics.

So the five cents got squeezed from both sides. In 2025, 42% of operators told the NRA their restaurant wasn’t profitable at all.

What stayed with me is how quiet this is. Nothing breaks. The room is full, the food goes out, the reviews are good. The money just leaks out in small amounts nobody is looking at: a supplier price that moved, a dish that hasn’t been repriced in two years, prep that ends up in the bin.

If you run a restaurant, the most useful question I found is a simple one. Take your best-selling dish and ask what it cost you to make last month compared to six months ago. If the answer takes more than a few minutes to find, that’s normal, but it’s also the problem.

It’s the part we’re working on at Dynamic.ly. For now I’m just glad I know where my dollar goes. I’ll probably tip a bit better.

Sources and evidence notes

  • National Restaurant Association, “Elevated costs continue to pressure restaurant profitability” (8 Jul 2026)
  • Bar & Restaurant, “NRA: Rising costs continue to squeeze restaurant profitability”
  • Menu prices, February 2020 to May 2026: Bureau of Labor Statistics data as reported by the National Restaurant Association.

Limitations

The cost split is the NRA’s pre-pandemic picture of an average US restaurant, rounded and before tax. The $20 pasta is a worked example of that average, not a real menu.

Read next

Issue 04Restaurant economics

Busy isn’t the same as profitable

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Issue 06Kitchen guides

Your prep list might still think it’s September

2 min

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