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On with Kara Swisher

Can Restaurants Survive Rising Costs?

Rising food prices, labor shortages, and (sometimes) unruly diners: What does it take to keep a restaurant alive in 2026?

Danny MeyerguestKara SwisherhostElazar SontagguestSusan Fenigerguest

Nov 12, 20261h 16mWatch on YouTube

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CHAPTERS

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Chapter summaries

Rising costs, labor pressures, and how restaurant culture has shifted since the pandemic
Kara Swisher sets the stage: restaurants face rising food costs, labor shortages, affordability pressures, and broader policy impacts. Elazar Sontag, Susan Feniger, and Danny Meyer describe how the diner–restaurant relationship has changed, especially around expectations and margins.
- •Elazar Sontag says hospitality and the diner–restaurant relationship now feel mismatched, with entitlement clashing against shrinking margins
- •Susan Feniger describes COVID-era pivots, ongoing community feeding efforts, closures, and reduced dining out
- •Susan connects labor shortages to fear among immigrant workers and broader industry instability
- •Danny Meyer frames a shift toward “convenience vs. experience,” driven by technology and delivery
- •Danny emphasizes restaurants as places for in-person community and “humanity”
From restaurateur to hospitality leader: building culture at scale
Kara asks Danny Meyer about the distinction between being a hands-on restaurateur and leading a hospitality company. He explains the operational and cultural shift from personally greeting guests to empowering teams to make hospitality decisions consistently.
- •Danny says the core remains caring about each guest experience, but leadership requires building a culture others can carry
- •He describes using technology to see who is dining, review reports, and track what happened at tables
- •Danny explains the tipping point where multiple restaurants made personal presence impossible
- •He reframes the job as leading people who can deliver hospitality without him at the door
Diversification for survival: commissaries, nonprofit partnerships, and feeding programs
Susan Feniger describes how her group diversified during COVID to stay afloat while supporting the community. She contrasts restaurant foot-traffic dependence with commissary and government/nonprofit funded meal programs that allow more predictability and new kinds of work.
- •Susan says diversification helped avoid layoffs and brought staff back to work
- •She outlines large-scale meal production for clinicians and for food-insecure communities
- •She explains how the commissary model requires business development through nonprofit and government relationships
- •Susan notes the operational shift to packaging and planning for known meal volumes rather than nightly covers
- •She highlights continued learning as a defining aspect of hospitality work
Food critics vs. influencers: anonymity, access, and what reviews do differently
Kara questions Elazar Sontag about being a non-anonymous critic and whether reviews still matter. Elazar argues reviews serve a different function than social content, emphasizing repeat visits, paying for meals, and reported context.
- •Elazar says true anonymity is increasingly impractical for a digitally visible generation
- •He still uses tactics like booking under aliases to reduce special treatment
- •Elazar distinguishes reviews from influencer content: multiple visits, no comps, and interviews with chefs
- •He argues criticism would be a loss if it disappeared, even if social video can be impactful
- •Kara tees up the influencer conversation as a shift in how diners learn about restaurants
Why reviews still matter: authority, team morale, and something to aspire to
Danny Meyer and Susan Feniger explain the continuing value of mainstream criticism, even as discovery has shifted to social media. They argue reviews now influence morale and standards as much as awareness, and Susan notes how critics can elevate overlooked restaurants.
- •Danny says critics once primarily helped people discover restaurants; now discovery happens before critics arrive
- •He argues reviews still move business and carry authority due to fewer mainstream reviewers
- •Danny says criticism motivates teams because you never know when a critic will show up
- •He describes missing the “edge” when major reviews become less frequent
- •Susan recalls the power of major reviews and praises the role of critics like Jonathan Gold in spotlighting lesser-known places
Restaurant rankings and capturing a region’s dining spirit
Kara asks Elazar about publishing a “40 best” list and why that format persists. Elazar frames it as honoring traditional criticism while capturing the story and spirit of a region through his point of view.
- •Elazar describes regional lists as rare media products that capture a place’s dining identity
- •He says the list reflects his perspective, not an objective final truth
- •He keeps certain traditions intact to preserve trust and establishment value
- •He says the number is 40 because it has historically been 40
- •Susan adds that restaurants often step up for communities during crises and that this generosity deserves attention
Essentiality: beyond perfection, toward meaningful impact
Kara introduces Danny Meyer’s concept of “essentiality” as a grand goal for restaurants. Danny explains it as creating something that makes life better because it existed, reframing closure from “failure” to whether a restaurant mattered to people and community.
- •Danny defines essentiality as something you’d deeply miss—like a favorite song, person, or place
- •He recounts shame after closing Tabla and laying off staff, then reframes the lesson around essentiality
- •He contrasts “immortality” with impact, noting restaurants aren’t permanent
- •Danny says hospitality is a means toward essentiality, not the end goal
- •Kara connects essentiality to the emotional importance of places beyond business success
When an essential place closes: community meaning vs. financial viability
Kara asks Susan about closing Alice B. in Palm Springs and what essentiality looks like in practice. Susan describes pride in the concept and community it served, alongside the hard business reality that made it unsustainable.
- •Susan says closures can feel heartbreaking and embarrassing, especially early in a career
- •She describes Alice B. as community-building, food-driven, and tied to a specific LGBTQ setting
- •She notes pride in recognition and the warmth of the space, but says it wasn’t financially viable
- •Susan cites factors like reduced going-out, seasonality, and being off the beaten track
- •She emphasizes closures ultimately become business decisions even when community grief is real
Little Deb’s Oasis, grief, and the problem of bland sameness
Elazar contrasts a deeply personal restaurant closing with the post-pandemic tendency toward safer, more familiar concepts. He describes how essential restaurants can feel like losing a relative, while also acknowledging why chefs may choose safer business models.
- •Elazar describes writing a personal essay about Little Deb’s Oasis and its importance to him and the queer community
- •He says the closure felt like bereavement and highlights how people “leave parts of themselves” in favorite restaurants
- •He links essentiality to impermanence and emotional investment
- •He explains “sameness” as chefs choosing safer concepts, often backed by real estate or hotel development money
- •He argues daring concepts can still exist with backing, but many default to familiarity to survive
Innovation vs. intent: what makes a restaurant feel singular
Kara prompts a discussion about sameness, innovation, and what truly differentiates restaurants. Danny argues sameness in menu items doesn’t equal sameness in experience, while Susan describes cooking from passion and authenticity; Elazar emphasizes “intent” and “soul.”
- •Danny cites a James Beard line: the best restaurant is the one that “loves me the most,” focusing on hospitality over novelty
- •He uses Rome’s trattorias to argue shared menus can still yield distinct identity and community connection
- •Susan says her menus reflect the food she loves, especially street food, and she avoids chasing trends like defaulting to chicken breast
- •She explains making dishes accessible through clearer language while keeping authenticity and technique
- •Elazar distinguishes between restaurants with a “fingerprint” and those built from market math rather than purpose
Handling unruly customers: noise, harassment, and boundaries in hospitality
A listener question about rowdy diners leads to a broader conversation on etiquette and restaurant control. Susan advocates gentle intervention; Danny compares noise to secondhand smoke and outlines firm boundaries; Elazar notes enforcement requires staffing and confidence.
- •Susan says managers should politely ask rowdy tables to lower volume while letting people enjoy themselves
- •She notes the delicate balance between a lively room and complaints that it’s too noisy or too quiet
- •Danny says restaurants won’t tolerate harassment of staff and may ask guests to leave
- •He compares disruptive noise (or overpowering cologne) to smoke affecting everyone else’s experience
- •Elazar says it’s appropriate to correct behavior, but doing so depends on strong support systems and seasoned teams
Why restaurants are struggling: fewer diners, labor fear, tariffs, and uncertainty
Kara shifts to economics: fewer people eating out, rising costs, and immigration pressures affecting labor. Susan and Danny describe the compounding effect of sales declines, higher labor/food/rent, and uncertainty; Danny also explains why tipping remains a structural fault line.
- •Kara frames the challenge as external pressures: affordability, rent, labor, food costs, immigration, and tariffs
- •Susan describes losing staff due to fear and notes immigrants are a major share of restaurant labor
- •She says operators are searching for a “new norm,” considering models like quick casual and diversification
- •Danny calls immigration the backbone of the industry and highlights the destabilizing effect of enforcement fear
- •Danny argues uncertainty around costs (including imports) harms already slim-margin businesses
Tipping as a broken system—and what experiments revealed
Danny explains why he tried eliminating tipping, why it returned, and how tip rules affect pay equity between front and back of house. Elazar adds how he uses Danny’s experience to explain to diners why understanding restaurant economics matters.
- •Danny says tipping is broken and describes trying no-tipping policies for several years before reversing course
- •He argues tipped workers benefit automatically from price increases, while cooks’ wages lag—especially where tip-sharing isn’t legal
- •Kara recounts seeing a kitchen surcharge option and connects it to pay inequities
- •Danny says his group introduced revenue share for cooks after bringing tipping back
- •Elazar tells diners it’s not a great system, but it’s the system currently in place
Social media and AI in restaurants: voice, marketing, and “advancing touch”
Kara asks how social platforms and AI are shaping restaurants, from QR codes to marketing content. Susan describes social media as work that keeps a business visible and gives her a voice; Danny frames AI as a way to personalize hospitality and remove administrative friction.
- •Susan says social platforms help grow business and create a direct channel to the public
- •She describes the real time cost of filming and content production, especially for longer-form video
- •Susan values the ability to advocate for issues like reducing food waste and using leftovers
- •Danny says technology should “advance touch” by removing friction and increasing humanity
- •He describes using AI for collecting and connecting customer preference data and reducing back-office burden so managers can be present with guests
The $60 loaf of bread, what goes viral, and leaving on what’s working
Elazar explains his approach to covering a viral $60 loaf of rye bread by focusing on what it says about consumers and the moment rather than pure outrage. The conversation ends with examples of restaurants and models that feel encouraging—or personally essential—to the guests.
- •Elazar says the bread story had already gone viral, so he aimed to extend the conversation with a different angle
- •He focused less on exact production economics and more on what the price signals about New York and consumer culture
- •He says the loaf was large and lasted him over a week, and that it was very good
- •Asked what’s succeeding, Elazar highlights Rye Bunny’s hybrid counter-ordering plus full-touch service model
- •The group closes with “essential” picks, emphasizing joy, accessibility, and how a restaurant makes you feel when you walk in

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