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Editor’s Note: This article is part 2 of PMQ’s 2026 Pizza Power. You can scroll down to the bottom to navigate to the next section of the report.
By Rick Hynum and Charlie Pogacar
As noted in part 1 of our 2026 Pizza Power Report, Loren Padelford, chief revenue officer at Slice, sees signs pointing to the end of the major chains’ dominance in the pizza industry. If that sounds wildly optimistic, take heed: There is some fresh—and eye-opening—data to back it up.
Research firm Datassential, which tracks more than 700,000 restaurants nationwide, released a report in September 2025 that poked holes in a commonly held myth: the dispiriting notion that 90% of restaurants fail in their first year.
Not only is it baloney, Datassential found, but pizzerias are the strongest performers in the restaurant industry as far as that metric is concerned, with only two out of more than 1,000 newly opened pizza shops closing within their first 12 months of operation in the past year.
Granted, that figure includes both franchised and indie pizza shops, and the former have built-in name recognition that a new independent pizzeria has to earn over time, bolstering their chances for success. Nevertheless, more than half of the roughly 75,000 pizza restaurants in the U.S. are independents (typically, operators with fewer than 10 units), industry estimates suggest.
According to Slice data for 2025, the top quartile of its pizzeria clients logs annual sales of $658,548, on average, while annual median sales for that same group comes in at $561,278. Padelford also notes, “We’re seeing around a 20% year-over-year increase in orders for indie pizza, which indicates strong growth in the sector.”
Even so, Michael LaMarca, master franchisor of Mayfield Village, Ohio-headquartered Master Pizza, concedes, looking at your bottom line can give you a headache.
“Sales are pretty strong, but costs are up with labor and cost of goods sold. One of the prevailing challenges right now is profitability.” There’s a lingering perception among customers that pizza should always be cheap, he says. “In fact, flour, tomatoes, cheese—these are expensive commodities. Twenty years ago, the margin was a lot bigger. To operate your business now, you have to be lean and mean to even [achieve] 2% to 3% profitability.”
On that front, a mid-2025 report from Restaurant365 (R365), a restaurant management platform, offered a sobering analysis. The report reflected input from 5,000-plus restaurateurs across all segments. And 89% of respondents said their labor costs shot up this year, with 62% reporting an increase of 1% to 5%. Twenty-seven percent saw an increase of 6% to 14%, and 11% said their labor costs were up by more than 15%.
In that same R365 survey, 91% said their food costs were up, too. For about half of them (51%), costs went up 1% to 5%, and 36% reported an increase of 6% to 14%. Thirteen percent said they have seen a hike of more than 15%.
Those respondents also fretted over how federal tariffs could further raise food costs. Sixty-four percent anticipate their food costs will rise between 1% and 10% due to tariffs alone, while 29% expect increases in the range of 11% to 25%. Seven percent are bracing for food cost hikes of 26% or more.
Higher tariffs are already driving up costs of imported ingredients like premium olive oils and cheeses. But it’s not just food that’s getting more expensive. When Anthony DeSousa, owner of Antonio’s Real New York Pizza in Estes Park, Colorado, ordered about $640 worth of oven repair parts from a Canadian supplier earlier this year, he was floored to get a surprise UPS bill for nearly $2,000 that included tariffs and fees. As The Wall Street Journal reported in September, the extra charges stemmed from a new U.S. policy that scrapped the long-standing rule letting low-value imports—anything under $800—enter the country duty-free. Now, carriers like UPS and FedEx must process customs duties on even small shipments, often adding their own brokerage fees along the way.
For small operators, that means routine import orders can suddenly cost triple what they used to—stoking real concern among pizzeria owners that rising tariffs will drive up food and equipment costs across the board.
Meanwhile, independent pizzerias still have to contend with stiffening competition from the major chains for customers’ spending money. Everywhere you look, brands like Domino’s and Papa Johns are bombarding Americans with discounted deals that only chains can afford to offer. Which leads us to part 3 of this year’s Pizza Power Report, so keep reading.
Click here to read part 3 of PMQ’s 2026 Pizza Power Report: Value War Rages as Chains Try to Loosen Customers’ Wallets
