Economic Uncertainty: What Rising Tariffs Mean for Your Restaurant

The latest round of tariffs that took effect on April 2nd has introduced another layer of uncertainty for restaurant operators across the country. While headlines focus on trade policy, restaurant owners are feeling the effects much closer to home—in inventory costs, staffing decisions, and long-term planning.

At ACE’d Accounting Solutions, we’re keeping a close eye on the ripple effects. Here’s what you need to know about how tariffs and economic volatility could impact your business day-to-day, and how to position your restaurant for success over the next 90 days and beyond.

Rising Costs and Operational Pressure

Cost of Goods Sold (COGS)

Imported food and beverage items are already seeing price increases—especially specialty ingredients, seafood, produce, and alcohol. Even if you source domestically, expect some trickle-down effects as supply chains shift and vendors adjust pricing to stay competitive.

To combat rising COGS, consider reviewing pricing on your highest-impact ingredients. It’s not realistic to shop every item weekly, but focusing on 3–5 high-volume or high-cost items can make a measurable difference. Shop around with multiple vendors, ask about bulk deals, and lean into ingredients that offer better margins without sacrificing quality.

Labor Considerations

When operating costs rise, staffing decisions get tougher. With tighter margins, it becomes even more important to optimize scheduling, cross-train staff, and monitor productivity closely. If your team is already lean, the focus should be on retention and maximizing efficiency.

Now is a smart time to evaluate shift patterns and align labor more closely with sales trends. Even small scheduling adjustments can improve coverage during peak hours and cut unnecessary labor during slower times. Keeping staff engaged with clear communication and opportunities to learn new roles can also boost morale and reduce turnover without increasing headcount.

Sales and Guest Behavior

Consumers may begin to tighten their wallets in response to broader economic uncertainty. That could mean fewer visits, lower check averages, or shifts toward value-oriented menu items. Staying nimble with pricing and promotions will be key to maintaining steady revenue.

Rather than raising prices across the board, now is a smart time to get creative with your offerings. Consider promoting high-margin specials, limited-time offers, or prix fixe menus that feel like a deal while supporting your bottom line. Monitor guest feedback and stay flexible.

90-Day Outlook: Focus on Flexibility

Over the next few months, adaptability is your best tool. Here are three steps to stay in control:

Watch COGS Weekly: Track price changes on key items and adjust purchasing or menu strategy accordingly. If you're already using tools like MarginEdge or xtraCHEF, now is the time to make sure you’re fully utilizing features like automated price flagging and recipe costing.

Forecast Cash Flow Frequently: Running a 13-week cash flow plan gives you visibility and helps avoid surprises. ACE’d Accounting Solutions offers cash flow forecasting services tailored to restaurant operators looking to stay one step ahead.

Control What You Can: From scheduling smarter to reducing waste, small efficiencies can add up quickly. Tighten inventory turns, minimize spoilage, and keep labor hours aligned with sales.

6-Month Outlook: Plan for Multiple Scenarios

Looking further ahead, the economic picture is uncertain. Rather than trying to predict what will happen, prepare for a range of possibilities:

• Model Best- and Worst-Case Scenarios: Consider how a 5–10% swing in COGS or sales would impact your break-even point.

• Build a Financial Buffer: Strengthen your cash position where possible, or revisit existing lines of credit to ensure access to working capital.

• Stay Informed, But Focused: You don’t need to watch every market headline, but having a few trusted sources—like Restaurant Business, Nation’s Restaurant News, or our social feeds—can keep you current without the overwhelm.

Capital Investments: Build, Buy, or Pause?

Thinking about expanding, upgrading, or investing in equipment? Here’s how to approach those decisions:

• Green Light: Projects that are already budgeted and deliver immediate ROI (like kitchen efficiency upgrades or labor-saving tech).

• Yellow Light: Expansion plans or major renovations may be worth pausing until costs stabilize or revenue trends become clearer.

• Opportunity: Some vendors are offering promos or favorable financing. If your cash flow allows, this could be a chance to lock in value before further economic shifts.

If financing is part of your plan, now may be the time to secure a rate while conditions remain relatively favorable.

Final Thoughts

Uncertainty doesn’t have to stop progress—but it does call for careful planning. By staying on top of costs, forecasting regularly, and making intentional choices around investments, restaurant operators can stay resilient in a changing environment.

At ACE’d Accounting Solutions, we work closely with restaurant owners to help make sense of the numbers and support confident decision-making. Questions, concerns, or just need a second opinion? Contact us! Whether you’re updating your cash flow plan, weighing a big purchase, or simply trying to plan for what’s next.