Texas Restaurants Squeezed by Soaring Costs and Credit Card Duopoly Fees

Texas restaurants are caught in a brutal economic vise. According to the National Restaurant Association, 50 percent of Texas restaurant operators did not earn a profit in 2025. This staggering figure exposes the harsh reality behind the scenes: rising costs on all fronts are making it nearly impossible for many eateries to stay afloat.

Kelsey Erickson Streufert, chief public affairs officer for the Texas Restaurant Association, bluntly sums up the crisis: “High costs are hitting restaurants on both sides of their math equation.” Since the pandemic, food costs alone have surged 35 percent. Labor and insurance expenses have also climbed steadily, squeezing already razor-thin margins.

But the financial assault doesn’t stop there. Credit card swipe fees, controlled by the Visa-MasterCard duopoly, have surged unchecked. Streufert explains, “They don’t face any competition, and they continue to raise their prices as a result.” This lack of market pressure means restaurants are forced to shell out more for every transaction, costs that ultimately get passed to consumers. The average American family ends up paying between $1,200 and $1,800 a year due to these escalating fees.

For restaurants, these rising input costs are only half the battle. When they try to raise menu prices to stay solvent, customers—already squeezed by the same inflationary pressures—cut back on dining out. Streufert notes, “Our customers have less flexibility and, frankly, less money to spend at our restaurants.”

The toll is already visible. Some restaurants closed their doors early this year, a typical period when struggling businesses give up after the holiday season. While Streufert cautions against panic, she acknowledges the harsh truth: “You can only run a business for so long and not be profitable, especially a business like a restaurant where they typically don’t have significant savings put aside.”

This crisis in Texas restaurants is a clear example of how unchecked corporate power and inflationary pressures combine to threaten small businesses and local economies. As credit card giants exploit their duopoly to hike fees, and inflation drives up basic costs, the American public pays the price—both at the register and in lost community staples. Without intervention, the resilience of Texas restaurants may soon be tested beyond repair.