Does it seem like more restaurants are charging $100 per person? Chef Bobby Flay says the cost should be even higher.

By Weston Blasi and Charles Passy

The celebrity chef says restaurants have to be expensive right now to survive: 'Most people are breaking even or less.'

Bobby Flay agrees that dining out has gotten expensive but says restaurants are still not charging enough to be sustainable.

'Even when I go to restaurants, just a neighborhood restaurant, it seems like it's $100 a person for your Tuesday-night restaurant. Everything seems a lot more expensive. But the bottom line is, they have to charge that, and even that is not even enough.'

That was restaurateur and TV chef Bobby Flay talking about the state of the restaurant industry in an appearance on CNBC this week, making the case for restaurants to charge more for their food.

Flay discussed how tough the restaurant business is, saying that even though the price of dining out is on the rise, three major costs of doing business are making it difficult for restaurants to survive, let alone thrive.

"There are three buckets," Flay said. "Occupancy cost [rent]. Traditionally high, especially in a city like New York. You have the cost of goods, food, liquor and spirits. Since COVID they have been through the roof, and they haven't come back in even though the pandemic is over. So those are very high."

And the biggest expense overall? Labor. "I get it, people want to get paid what they think they should be paid, and I completely understand that," he said. "But there has to be a balance so these businesses can stay in business, so we still have a lot of jobs."

Restaurants are "having the hardest time in my lifetime, for sure," said Flay, who started his career as a chef in the late 1980s and hit it big in the '90s when he helmed Mesa Grill in New York City. He went on to become a star on the Food Network.

Flay was not immediately available for comment.

Of course, even higher prices could be hard for some customers to swallow. Menu prices in U.S. restaurants went up 31% on average from 2020 to 2025, according to the National Restaurant Association, outpacing overall inflation during that period. But the costs for food and for restaurant labor each went up 35% over the last five years. Restaurant owners have an average 3% to 5% pretax profit margin for food, the group says.

Read more: As food prices rise, what keeps consumers dining out?

Sara Senatore, an analyst with Bank of America who tracks the restaurant industry, said that restaurants have no choice but to raise prices if their operational costs are jumping.

"They increase prices because their own input costs go up," she said.

It is a delicate balance. Raising prices to make sure a business is healthy may make sense, but if prices get too high, customers may opt to go to a competitor's restaurant that offers lower prices, or simply stay home and cook.

"Consumers will gravitate elsewhere if your prices are too high," Mark Kalinowski, a veteran restaurant-industry analyst, told MarketWatch. Those inevitable pressures on operators can push them to keep prices low, even if doing so hurts the restaurant's bottom line.

Read more: As fast-food chains fight to keep value meals cheap, McDonald's offers $5 McMuffin, $8 Big Mac deals

Restaurants fall into the discretionary-spending part of the household food budget. And generally, research shows that when people are anxious about the economic future, they spend less on eating lunch and dinner out.

In an effort to stay in business in recent years, some restaurants have opted for ghost kitchens, which are delivery-only, or are testing out artificial intelligence to decrease costs. Some companies that are leveraging AI at their restaurants include Chipotle (CMG), as well as Yum Brands (YUM), which owns Taco Bell, KFC and Pizza Hut.

"If they are lucky, they are eking out a profit," Flay concluded about restaurants, especially those in big cities. "Most people are breaking even or less."

He added that this is the first time in his life that he doesn't have a restaurant in New York City. "I need to at some point reopen something in New York," he said, "but I know if I do it tomorrow, I'm probably not going to make a penny."

-Weston Blasi -Charles Passy

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10-04-25 1012ET