Irish Food & Hospitality 2026 unpacked. Part 1
- Food Business Coach Tracie
- Jan 5
- 7 min read
PART 1 of 3
Ireland’s eating‑out market is bigger than ever, but growth is slowing and profit is under real pressure. In 2026, most businesses will grow only a little in money terms, so winning will be about smarter operations, sharper value and picking the right niches.
SWOT: Irish Foodservice in Plain English
Strengths
Big and resilient market
People still spend over €10 billion a year eating and drinking out, which is about one‑fifth more than before Covid.
That shows there is still strong, long‑term demand, even though visits have flattened.
Plenty of ways to earn
Money comes from lots of places: quick‑service, full‑service, pubs, hotels, coffee shops and “day‑out” venues like arenas and attractions.
Limited‑service (QSR, fast casual, food‑to‑go) is now the single biggest slice of the pie, giving a solid base of everyday, repeat business.
Public sector growth engine
The Government’s hot school meals scheme is now serving around 550,000 lunches a day and has pushed education food spend up by more than 40% in a year.
This is lifting the whole institutional side of the market and creating reliable volume for caterers and suppliers.
Strong local food story
Irish operators buy heavily in fruit/veg, meat and dairy, which fits perfectly with a story of freshness, locality and quality.
That gives a clear edge against more anonymous international offers if it is used well in menus and marketing.
Weaknesses
Profits being squeezed
The cost of food, drink and packaging is growing faster than sales, so that thin 3–5% profit many places rely on is being eaten away.
One bad year or a few quiet months can now push a fragile business over the edge.
Eating out feels too expensive
Since 2020, restaurant prices are up about 26%, while general prices are up about 20%, so foodservice feels like it has “run ahead” of everything else.
Many people now see eating out as a treat, not an everyday option, so they cut back on how often they visit.
High and rising labour costs
Wages, sick pay and pensions mean staff can account for 40–45% of costs in some hotels and other sites.
Owners are spending more time on scheduling, trimming hours and redesigning service just to stand still.
Rural businesses are exposed
Pubs and hotels outside cities are more likely to see falling sales, shorter opening hours and, in some cases, closures.
Demand and spending power are increasingly clustering around Dublin and other big centres.
Opportunities
Riding the education and institutional wave
School meals, healthcare and workplace catering are all growing, with institutional food expected to be up over 12% again in 2026.
These contracts are lower‑margin but high‑volume and more predictable, which can balance a lumpy restaurant trade.
Using technology to save time and money
Self‑service kiosks, good POS systems and better ordering tools can cut down on front‑of‑house labour and mistakes.
When used well, tech speeds service, increases average spend and gives better data on what sells and when.
Drinks as margin drivers
Non‑alcoholic drinks already make up roughly a quarter of takings in some segments and are growing fast, especially iced coffee, matcha and premium soft drinks.
These often carry higher margins than food, so smart drink menus can quietly lift profit.
Experience‑led offers and events
“Big night out” occasions, concerts, sports and competitive socialising venues (bowling, darts, etc.) are seeing strong spend per head.
People who commit to an experience tend to worry less about price once they are there, which softens the impact of inflation.
Threats
Flat or falling footfall
Visits are not really growing, and in some cases are falling, even if average spend per visit is up a bit.
Guests are trading down to cheaper options or sharing, which caps revenue even on busy days.
Cost‑of‑living and value perception
Because menu prices have risen faster than general prices, many customers feel they no longer get good value from eating out.
Until pay packets catch up, or menus feel better value, real growth will stay slow.
Tourism downturn and global risks
Overseas trips to Ireland are down about 9%, nights down 7%, and Ireland is seen as an expensive destination.
Questions over global tariffs and wider economic softness could keep a lid on tourist‑driven spend in 2026.
Bigger players calling the shots
Large chains, contract caterers and wholesalers are getting more dominant, which gives them more buying power and leverage in negotiations.
Independents and smaller suppliers can struggle to match the prices and tech investment these “power buyers” demand.
Key Insights, Simply Explained
The market is growing, but more slowly
Total spend went up about 5% in 2025, but that is the slowest since Covid and is mostly price increases, not more people through the door.
Commercial restaurants and pubs grew by just under 4%, while institutional channels jumped by over 15% because of schools.
Costs are racing ahead of income
What operators spend on food, drink and packaging rose about 6.2% in 2025, faster than their sales.
This makes it harder to keep menus keenly priced and still walk away with anything left at the end of the month.
Prices on menus are still going up faster than “normal”
Menu inflation for 2025 is around 3.6% vs a long‑term average of about 2.7%, and it is expected to stay above that average into 2026.
That means many households will keep seeing eating out as a treat to be rationed.
Quick, casual and convenient is winning
Over time, money is shifting from traditional sit‑down restaurants into counter‑service, fast casual and food‑to‑go, which use fewer staff and turn tables faster.
This is a structural change, not a passing fad.
Cities and the countryside are on different paths
Dublin and other cities benefit from events, tourism and office workers, keeping volumes steadier.
Many rural businesses see weaker mid‑week trade, earlier kitchen closures and more pressure overall.
Key Trends for 2026 in Everyday Language
How customers are changing
Fewer visits, bigger bills
People are going out less often, but when they do, they may still order starters, drinks or desserts, so the bill per visit can be higher.
They make that possible by cutting out other occasions entirely or swapping a full meal for a cheaper option.
Value is everything
Menus are being reshaped to feature dishes that are cheaper to produce but still feel generous and satisfying.
Guests are hunting for deals: early birds, set menus, lunch offers and bundles are pulling more weight.
Convenience over ceremony
Limited‑service restaurants are forecast to grow by around 5.5% in 2026, faster than full‑service, because they are quicker, simpler and often cheaper.
Food‑to‑go sites on roads, forecourts and in suburbs are catching trade from commuters and families on the move.
Tech and how businesses run
Self‑service and better till systems
Kiosks and modern POS systems are becoming “must‑haves” in busy sites to handle orders, link to kitchens and track sales properly.
This reduces the need for as many front‑of‑house staff and cuts down on errors and queues.
Digital ordering as an expectation
Customers, especially younger ones, now expect online ordering, click‑and‑collect and the ability to pre‑order in workplaces and schools.
In canteens and contract sites, clients also want live data and reporting, not just “good food and a smile”.
Big tech gap between chains and independents
Large groups can spread the cost of new systems across dozens of sites, but a single café or restaurant may struggle to fund the same tools.
That risks a two‑speed market where bigger players get more efficient and independents fall behind.
What is happening by segment
Coffee shops
Like‑for‑like sales are flat, so growth mainly comes from opening new stores, especially in suburbs, travel hubs and shopping centers.
Under‑30s are driving booming cold drink sales (iced coffee, matcha, lemonades), often at premium prices.
Hotels
Many hotel restaurants are just about holding revenue, using breakfast (sometimes up to half of F&B income) to carry the day.
There is a clear move to relaxed, all‑day menus and away from formal dining, but high labour and energy bills keep margins thin.
Pubs
City pubs are holding up better than rural ones, with business heavily weighted to Thursday–Saturday and event nights.
Pubs are protecting their identity as drink‑led while using food and low/no‑alcohol options to widen appeal.
Workplace and public‑sector catering
Offices are typically 3–4 days a week in person, with those days often as busy as pre‑Covid; remote days can be very quiet.
Employers are using free or subsidised food and events to tempt staff into the office, but are extremely cost‑conscious.
Policy and the bigger picture
VAT cut in the Republic from mid‑2026
The planned VAT drop from 13.5% to 9% should give operators some breathing space on margins.
Most in the industry expect this to shore up businesses rather than show up as big price cuts on menus.
School meals and public contracts
Continued investment in school meals and public‑sector food means long‑term demand for compliant, scalable solutions.
However, these contracts demand strong reporting, sustainability data and consistency, which favour well‑organised suppliers.
Key Focus Areas for 2026, Explained
1. Fix margins with smarter offers, not just higher prices
Use menu design to swap in better‑margin dishes, lower‑cost proteins and strong drink add‑ons, so guests feel looked after but the business still makes money.
Treat the VAT reduction as a way to rebuild profit and invest in the business, while communicating clearly where you are able to pass on savings.
2. Use technology as a “force multiplier”
For operators: pick tech that directly saves labour or drives sales (kiosks, integrated POS, online booking/ordering) rather than chasing every shiny new tool.
For suppliers and wholesalers: make sure product data and photos work on digital ordering platforms, and offer online tools, training and insights as part of the service.
3. Prepare for powerful customers and more consolidation
Split your approach for independents versus chains/contract caterers: they need different pricing, support and menu ideas.
Know your cost‑to‑serve for each customer type so you can negotiate confidently with big buyers and still make a fair margin.
4. Grow with education, healthcare and workplaces
Build offers that suit schools, hospitals and offices: nutritionally balanced, easy to produce at scale, and sensitive to culture and dietary needs.
Be ready to supply detailed reports on sustainability, waste and performance, as these are now standard asks in tenders.
5. Stand out with experience, local stories and real sustainability
Turn visits into experiences: themed nights, chef events, pairings, live demos and social experiences that justify the spend.
Make local sourcing and visible, practical green actions (waste cuts, energy savings) part of the offer, especially in rural and tourism‑driven sites that need reasons for guests to travel and spend.
Part 2 and 3 coming soon...
For FULLY FUNDED services email Tracie at tracie@traciedaly.com to enquire about your eligibility.
Tracie Daly
Food Business Coach
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