Experts Cite Rising Costs as Reason for East Texas Restaurant Closures

Industry leaders say profit margins are being squeezed from all directions, leading to a wave of shutdowns for both chains and local eateries.

Jan. 28, 2026 at 3:55pm

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A growing number of restaurants in East Texas have closed in recent months, with experts citing rising costs for food, labor, and credit card processing fees as the primary drivers. Both national chains and locally owned businesses have been impacted, with some citing bankruptcy and others saying they've exhausted all available options. Industry leaders say the closures reflect broader economic pressures affecting the restaurant industry across Texas.

Why it matters

The restaurant industry is a major economic driver in East Texas, and the wave of closures highlights the financial challenges facing both large chains and small, independent eateries. The situation raises concerns about the long-term viability of the region's dining scene and the impact on local communities that rely on these businesses.

The details

Recent high-profile closures in the Tyler area include Razzoo's Cajun Cafe, Corner Bakery Cafe, Hangry Joe's, and Spring Creek Barbeque. Locally owned restaurants like Roma Italian Kitchen & Bar and Moody Family Wines have also announced plans to shut down, citing exhausted options and retirement, respectively. Industry leaders say restaurants are struggling with a 37% increase in food costs, 30% rise in labor costs, and over 70% jump in credit card processing fees since the pandemic.

  • In October 2025, Razzoo's Cajun Cafe filed for bankruptcy and closed its Tyler location in late December.
  • In late December 2025, Corner Bakery Cafe closed, calling the decision 'difficult' after years of serving the community.
  • Earlier this year, Hangry Joe's and Spring Creek Barbeque both closed their Tyler restaurants for undisclosed reasons.
  • In December 2025, Roma Italian Kitchen & Bar announced it would close after five years in business, saying it had exhausted all available options.
  • In January 2026, Moody Family Wines in Bullard announced it would scale back operations ahead of a planned full closure in 2026 as the owners prepare for retirement.

The players

Kelsey Erickson Streufert

Chief public affairs officer for the Texas Restaurant Association.

Razzoo's Cajun Cafe

A restaurant chain that filed for bankruptcy and closed its Tyler location in late 2025.

Corner Bakery Cafe

A restaurant chain that closed its Tyler location in late 2025, calling the decision 'difficult' after years of serving the community.

Roma Italian Kitchen & Bar

A locally owned restaurant that announced it would close in December 2025 after five years in business, saying it had exhausted all available options.

Moody Family Wines

A locally owned business in Bullard that announced it would scale back operations in 2026 as the owners prepare for retirement.

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What they’re saying

“This is really a math problem. Restaurant profits are notoriously thin, and right now those profits are being squeezed from every direction.”

— Kelsey Erickson Streufert, Chief public affairs officer, Texas Restaurant Association (ketk.com)

“There's only so much people can pay for a restaurant meal before it becomes inaccessible. That's where restaurants have to make really strategic choices.”

— Kelsey Erickson Streufert, Chief public affairs officer, Texas Restaurant Association (ketk.com)

“The differentiator is whether a restaurant can lean into value, experience and hospitality and really focus on what they do best.”

— Kelsey Erickson Streufert, Chief public affairs officer, Texas Restaurant Association (ketk.com)

The takeaway

The wave of restaurant closures in East Texas highlights the broader financial pressures facing the industry, with rising costs for food, labor, and operations squeezing profit margins for both national chains and local eateries. As the region's dining landscape evolves, experts say restaurants that can adapt by focusing on value, experience, and community support will be best positioned to weather the storm.