Even as much of the restaurant industry stabilizes after several turbulent years, a new report suggests that thousands of locations could still be at risk for closure in 2026—a trend that could reshape competition in many local markets.
For pizzeria owners, that could mean fewer nearby competitors. But it’s also a sign of the continued financial strain facing restaurants in all segments of the industry.
New research from Black Box Intelligence analyzed sales performance across the restaurant units it tracks and found that while most locations are performing near their peak levels, a small but significant share are struggling enough to face potential closure.
Related: Why NYC’s Tipped Wage Movement Could Hurt Pizzeria Owners
To identify restaurants at risk, Black Box Intelligence compared each unit’s 2025 sales to its highest annual sales between 2019 and 2025. Locations generating 70% or less of their peak sales—meaning they’ve lost at least 30% of their best-performing year—were categorized as “at-risk” heading into 2026.
Overall, the vast majority of restaurants remain stable. About 85% to 90% of units are operating at or near their historical peak performance, the report found.
However, roughly 9% of full-service restaurant units are considered at risk of closure, with casual-dining brands accounting for a large share of those locations. In contrast, only about 4% of limited-service restaurants fall into the at-risk category.
The findings align with a previous Black Box Intelligence study from October 2025, which showed strong growth for quick-service and fast-casual restaurants since 2022. Fast-casual brands recorded 15.5% net unit growth, while quick-service restaurants grew 5.8%. Meanwhile, casual dining has seen the opposite trend, with closures outpacing openings and producing a net unit decline of 3.3%.
Geography also plays a role in determining which restaurants are most vulnerable. Markets with high restaurant density and lower median household incomes appear to face the greatest risk. After several years of elevated inflation, many consumers in these areas have shifted toward lower-priced dining options—or are choosing to eat at home more often.
Black Box Intelligence also noted that some of the markets with the highest risk levels also report higher diabetes rates, which the company uses as a proxy for adoption of GLP-1 weight-loss medications. The growing use of these drugs could mean reduced food consumption, potentially adding further pressure on restaurant traffic.
At the same time, operators continue to grapple with rising costs. Inflation has pushed restaurant expenses up by nearly one-third since 2019. According to Black Box, that means “it’s virtually impossible to stay open with such major drops in sales.”
The most vulnerable locations are those that have seen the steepest declines. According to the report, about 3% of full-service restaurants and 1% of limited-service units lost more than 50% of their peak sales in 2025. Those restaurants are the most likely candidates for closure if performance does not improve quickly.
“If these units can’t turn things around, the question is not if they will close, but when,” the report suggests.
Still, the industry could see a potential upside if closures occur. In heavily saturated markets, shuttering underperforming restaurants may shift customer traffic to nearby locations, improving performance for the operators and brands that remain.
