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In a Growing Economy, U.S. Restaurant Outlets Decline

Empty boxes in an empty, shuttered bakery
Empty cash drawer & boxes inside a shuttered QSR

The U.S. restaurant count reached 647,288 units in the autumn of 2017. That is a 2 percent decrease in the number of restaurant outlets from a year ago. The primary source of the decline in U.S. restaurant units was a three percent drop in independent restaurant units compared to a stable count of restaurant chains, reports global researcher The NPD Group in its Fall 2017 census of commercial restaurant locations in the United States.

Restaurant chain counts grew to 301,183 units, a 982 unit increase, which kept the total chain count flat compared to fall 2016. The total number of independent restaurants declined to 346,105 units, a decrease of 10,952 units from last year.  

Quick service restaurants declined by 1 percent to 353,121 units. Fast casual chains, which are a restaurant sub-category under quick service restaurants, increased units by four percent to a total of 25,118.

Full service restaurant units, which include casual dining, family dining, and fine dining restaurants, stood at 294,167 units in fall 2017, a two percent decline, according to NPD, which includes in its fall 2017 census all restaurants open as of September 30, 2017.   

According to the researcher, total U.S. restaurant traffic ended 2017 flat. Had it not been for a 1 percent increase in quick service restaurant visits, an increase primarily driven by marketing initiatives by chains, restaurant traffic would have declined.

The decline in the count of restaurant outlets is in contrast to what is happening to the U.S. economy.  Gross Domestic Product in America grew by 2.3 percent in 2017, according to a preliminary estimate in January by the U.S. Department of Commerce’s Bureau of Economic Analysis. America’s number of mouths grew too. America’s population grew by roughly 0.7 percent in 2017, according to the latest tabulations from the U.S. Census Bureau.

“The U.S. restaurant count is reflective of what’s happening in the foodservice industry today overall,” says Bonnie Riggs, NPD’s restaurant industry analyst. “To expand or not expand units is a calculated decision on the part of restaurant operators. Chains simply have more monetary resources to grow units whereas independents do not.”   

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Don Sniegowski is editor of Blue MauMau, the daily news journal for franchise & small business owners. Call him at +1 (270) 321-1268, tweet @bluemaumau or email don@bluemaumau.org.