HOLLAND, Mich. — Michigan restaurant operators are struggling at a higher rate than their peers across the country, according to an April 2026 survey from the Michigan Restaurant and Lodging Association — and a Holland-area owner of four restaurants says rising costs are to blame.
WATCH: Michigan restaurants feel more financial pressure than national peers, Holland owner says
"Michigan is seeing an outsized impact and an outsized amount of pain, more so than other states and there are some things specifically that make it unique to where it is more challenging in Michigan," Lucas Grill said.
Grill is the owner and operator of 1983 Restaurants, which includes Seventy Six, Obstacle Number 1 and Lovejoy in Holland, as well as Public in Zeeland.
The survey found 51% of Michigan operators reported same-store sales dropped over the past year, compared with 39% nationwide. More than half — 55% — reported a decline in customer traffic, versus 46% nationally.
Rising food costs topped the list of challenges for 23% of Michigan operators, followed by labor costs at 19% and the overall economy at 16%. To offset expenses, 66% of Michigan restaurant owners said they raised menu prices in the past year.
Grill said high gas prices have cut into customers' discretionary spending.
"Things like gasoline and groceries, you have to buy those for your kids, for your family, for your wife, whereas a restaurant that's optional," Grill said.
Delivery costs are also climbing. Grill said suppliers have added fuel surcharges that are becoming routine.
"We do not get frozen products, all of our fish is fresh, and they just tripled their fuel surcharge for every truck," Grill said. "It's getting very, very common for pretty much anyone that drops off at your back door to add some sort of a fuel surcharge."
Those added costs compound with other expenses Michigan operators face, including utilities and insurance that exceed national averages.
"In the state of Michigan, our utility prices for restaurants are 22% higher than the national average," Grill said. "Did you know that the liquor liability insurance that restaurants [in Michigan] pay is double the national average? ... We pay almost double the national average to ensure our guests safely. It's required by law as well for that insurance."
Grill said the combination creates a cascading effect on both businesses and consumers.
"Our labor is a little more expensive, our utilities is more expensive, our gasoline price is more expensive, which hurts the ability for the consumer to have the money to come out to eat, and you start to pile all these things together, that's when you see more of a profound compounded effect on the consumer and on restaurants," Grill explained.
In response, Grill said he has worked to keep prices accessible at his restaurants.
"At Public, one of my restaurants, we lowered all our prices at lunch across the board. Here at Lovejoy, our highest entree is $29. There's nothing over $30 and everything's made from scratch, homemade kitchen," Grill said.
He said supporting locally owned restaurants is more important now than ever.
"If you go to a small mom and pop restaurant like Lovejoy, Public, I live locally, my kids go to school locally, our profit is being distributed back into the local community," Grill said. "We need everyone to kind of rally around these businesses and understand it is a delicate ecosystem."
Despite the challenges, Grill said he remains optimistic.
"At the end of the day, there's hope, because people love eating out, right? At the end of the day, people want to have somebody cook for them. They don't want to do the dishes, they want a great, delicious meal," Grill said.
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