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Restaurant Count in 2016 Drops Most Since Recession

The number of restaurants in the United States has fallen to its lowest level in ten years, according to a count of commercial restaurant locations compiled each spring and fall by a major foodservice researcher. Restaurant locations fell in 2016 by two percent, according to The NPD Group.

Restaurant density, which is measured in units per million population, has dropped from 1,992 units per million in the Fall of 2007 to 1,924 units per million in the Fall of 2016, based on researcher The NPD Group's Fall count, which included restaurants opened as of September 30, 2016.

Hardest hit have been independent restaurant units, which decreased by four percent. Restaraunt density declined from 1,132 units per million a decade ago to 1,002 units per million in Fall 2016. On the flip side, chain restaurant unit counts grew by one percent in 2016 increasing to 297,351 units, according to NPD. Density of chain restaurants grew from 860 units per million in 2007 to 922 in 2016.

The decline in independent restaurant units sourced to both the quick service and full service segments. The higher concentration of independent units, however, is in the full service segment, which includes casual dining, midscale/family dining, and fine dining. The fast casual quick service segment, which includes selected chains identified by NPD as "fast casual," continues to expand, increasing units by 7 percent to 23,798. Density of fast casual restaurants is 74 units per million in fall 2016, up from 41 units per million in fall 2007.

Total U.S. restaurant visits dipped slightly in the year ending December 2016, according to NPD's ongoing foodservice market research, CREST®. Quick service restaurant traffic, which represents 80 percent of total industry traffic, was flat last year. Visits to independent restaurants declined by two percent and chain restaurant visits were up one percent.

"This is the most significant drop in total U.S. restaurant counts since the recession," says Greg Starzynski, director- product management, NPD Foodservice. "If consumers continue to reduce their restaurant visits, we expect the number and density of restaurant units will continue to decline in response to the lower demand."

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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.