It Won’t Be Long Before Most U.S. Restaurants Are Chains

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It will inevitably become a Cheesecake Factory.
It will inevitably become a Cheesecake Factory. Photo: Joseph Sohm

Over the past year, according to new data by market researcher NPD Group, the total number of U.S. restaurants shrunk by one percent … even though Starbucks, Chipotle, Dunkin’ Donuts, and Subway collectively opened thousands of brand-new locations. Basically, that means it’s a tough business if you’re not a chain, and it’s pretty clear that the mom-and-pop operations of America have reason for alarm.

The majority of America’s restaurants have always been independently run. At NPD Group’s last count, non-chains still accounted for 54 percent of U.S. restaurants, but if the current trend continues, that majority won’t last but another year or two. It’s still unclear what effect a $15 living wage would have on small-business owners, but as more cities begin raising the minimum wage, it will cost mom-and-pops more than the 22 cents per Big Mac it will roughly require of McDonald’s.

The obstacle is murderously high rent prices, as a Times story points out today. When a diner or bodega can’t afford a quadrupled rent or an attorney to fight the hike, a chain will swoop in for the kill. This problem is most acute in big cities like New York, of course, where it’s exacerbated by chain growth. The year 2014 had the decade’s biggest increase in chain stores, and marked the sixth straight year of chain growth, bringing the citywide tally to 7,473. “I see more Duane Reades and Rite Aids coming up everywhere, and the only difference between them and us is that they have a pharmacy,” the president of the Bodega Association of the United States ominously tells the paper. “I go inside, they have yogurt, they have beer. I think to myself, This is a bodega.”

[CNBC, NYT]

It Won’t Be Long Before Most U.S. Restaurants Are Chains