Tariffs on restaurants are making things very difficult for the industry, especially for quick-service restaurants. Prices are going up in almost every area. Ingredients now cost more. Packaging is getting more expensive. Even basic items like napkins and takeout boxes are cutting deeper into budgets. For many quick-service restaurants, the main concern is no longer just speed but how to stay in business.

What’s causing all this pressure?

The U.S. government has added or is planning to add new tariffs on important imports from countries like China, Mexico, and Canada. These countries provide many things that restaurants rely on, such as kitchen tools, food packaging, and key ingredients. The goal of these tariffs is to support American manufacturing, but the result is higher costs for restaurants. For quick-service restaurants that already have very small profits, these extra costs are hitting hard.

In this blog post, we will explore the top 5 most significant threats to QSRs following the implementation of tariffs on restaurants.

Top 5 Biggest Threats to QSRs Post-Tariffs on Restaurants

1. Rising Prices and Consumer Sensitivity to Cost

Tariffs have made it more expensive to get important supplies like food packaging, ingredients from other countries, and kitchen equipment. If your business relies on low-cost imports, these new fees hit hard. And when your costs go up, you either take the loss or raise prices. But here’s the problem: your customers are already very sensitive to price changes.

A Zappi survey found that 34% of people said they would stop buying fast food if prices went up by just 5%. That’s not a lot of room to adjust. Even adding a few cents to a value menu item could mean losing a sale. Quick-service restaurants rely on high sales volume, but if a small price increase scares away a third of your customers, it puts your business in a risky spot. On top of that, rising inflation and higher wages make it harder to keep your profits without raising prices. Unless you find new ways to offer value, you’re stuck in a tough situation.

2. The Rise of Value-Focused Full-Service Restaurants

Full-service businesses are beginning to overtake quick-service restaurants, despite their best efforts to maintain cheap rates. Businesses that are focusing on value, such as Chili's, Applebee's, and Outback, are seeing success. People can sit down, eat larger meals, get table service, and even order drinks for a few dollars more than they would pay for a standard drive-thru lunch.

From the customer's standpoint, it makes more sense. When you can have a whole meal for $13 or $14 and unwind while you eat, why spend $11 on a chicken sandwich and fries? Particularly now that fewer people are dining out and choosing something that seems more like a treat.

These full-service businesses are successful because they give customers the impression that they are receiving more food, more attention, and better value in general. And QSRs struggle to compete with it. Fast food's original appeal, its quick service, affordable prices, and convenient grab-and-go options, is seriously threatened.

3. Shifting Consumer Behavior and Expectations

Today’s customers aren't the same as before. More people are cooking at home, planning meals, and sticking to tighter budgets. Eating out has become more of a treat than a habit. So, when they do choose to dine out, they want it to feel worthwhile.

Quick-service restaurants once thrived on convenience. Lunch during a work break, dinner between errands, that kind of impulse behavior kept sales moving. But that mindset is shifting. Post-pandemic, people are more thoughtful about where their money goes. They’re asking:

“Is this worth the price?”
“Do I want this, or am I just settling?”
 “Will this meal feel like something special?”

Speed alone isn’t cutting it anymore. You have to offer better food, better presentation, and a reason to come back. And just as importantly, the experience needs to spark an emotional response. Whether it’s comfort, fun, or nostalgia, people want to feel something when they spend their money.

Casual dining chains have already caught on. They’re creating lively environments, leaning into creative flavors, and building brands that feel engaging and current. QSRs that stick with the same formula run the risk of falling behind in a world where connection and experience count just as much as convenience.

4. Viral Cultural Relevance of Full-Service Brands

Take Chili’s, for example, they’ve blown up on TikTok and Instagram with funny memes, influencer shoutouts, and clever pop culture tie-ins. They’ve managed to feel fresh and fun again, which is bad news for QSRs trying to hold Gen Z’s attention.

This generation isn’t just scrolling for food pics. They’re looking for moments to share, experiences that spark nostalgia, and brands that genuinely feel authentic. A group dinner at Applebee’s with friends is more likely to end up on social media than a solo burger in your car. Cultural relevance is no longer optional; it’s a must. It gives full-service brands an edge, and they’re using it to pull younger diners away from fast food. If your QSR doesn’t have a personality, a presence, or anything worth posting about, you’re already falling behind.

5. Limited Room for QSRs to Maneuver Without Alienating Core Customers

If you raise your prices, regular customers who are trying to save money might stop coming. If you make the food smaller, people might complain online. That’s what happened with “shrinkflation.” If you lower the quality, people might stop trusting your brand.

It feels like there are no good choices. Meanwhile, full-service restaurants are giving people more. They’re offering big meals with full plates and extra sides. They’re telling customers, “We know you want more for your money, and we’re here for you.” And they’re doing it without cutting quality.

Quick-service restaurants don’t have many options. When things like napkins, buns, and takeout boxes cost 15% more because of tariffs, it’s hard to keep prices low. 

What QSRs Can Do to Stay Competitive Amid Tariffs on Restaurants

Tariffs on restaurants may be making things more complicated, but there are still smart, strategic moves you can make right now to stay competitive, protect your margins, and build lasting loyalty. Here’s what that can look like:

• Double Down on Core Value

Think about why people liked your restaurant in the first place. It wasn’t just because it was cheap. It was because they felt they got good value for their money. That’s what you need to focus on now.

This could mean using better ingredients, making service faster during busy times, or offering meal deals that feel like a bargain. Special limited-time offers can still bring in customers if they give people something they want.

Now is also a good time to improve how your restaurant runs. Try to waste less. Keep your menu simple and stick to your best items. Work with partners who understand your challenges and can help you keep things running well without spending too much.

Also, invest in good packaging. Good packaging keeps food fresh, looks nicer, and shows customers that you care about quality.

• Communicate with Honesty and Transparency

Customers don’t like surprises, especially on the receipt. If you’ve had to raise prices, tell them why. Don’t dance around it. Be clear, direct, and human. Say, “We’re doing everything we can to keep costs down, but rising import and ingredient costs have made some price adjustments necessary.”

Being honest with your customers shows respect. It builds trust. And that trust can go a long way toward keeping them coming back. Utilize your packaging, signage, and online platforms to convey your story effectively. When people understand what’s happening behind the scenes and that you’re not cutting corners to save a buck, they’re much more likely to stick with you.

• Prioritize Long-Term Loyalty Over Short-Term Profit

Look for ways to reward your regulars. A simple loyalty program can go a long way. Make returning customers feel seen with exclusive perks or early access to new items. Keep promotions fresh, generous, and authentic. People can spot a money grab from a mile away.

Also, stay active where your customers are, especially online. Respond to comments, thank people for reviews, and show appreciation. Make your restaurant feel like part of their daily life, not just a pit stop for fast food. When you build that emotional connection, you’re not just selling meals, you’re building a brand they want to come back to.

Need a TRUSTED Custom Food Packaging Partner That Understands QSR Challenges?

The challenges QSRs face today aren’t just about food; they’re also about packaging, supply chains, and the overall consumer experience. 

If you need a food packaging partner who understands the pressure you're under and can deliver custom food packaging that balances durability, cost-efficiency, and branding, you’re in the right place. SupplyCaddy collaborates with QSRs across North America to provide high-quality, tariff-conscious food packaging manufactured in the USA, Turkey, and South America. That means reliable delivery, better pricing, and no surprises from overseas tariffs. Contact us at hello@supplycaddy.com.