Lots of interesting information from the Wall Street Journal on the current state of the restaurant business. Simply put, if you thought that a bunch of eateries catering to herds of always-eating-out millennials were going to transform your city’s downtown, you’re likely to be disappointed.
The U.S. is having one of its biggest restaurant shakeouts in years, as an oversupply of eateries and new rivals offering prepared meals to go claim what is expected to be a growing number of casualties.
In one recent week alone, three restaurant companies filed for chapter 11 bankruptcy protection, including Così Inc.; Rita Restaurant Corp., parent of the Don Pablo chain, and Garden Fresh Corp., which operates Souplantation and Sweet Tomatoes. At least five other restaurant operators have filed for court protection this year, with restructuring plans that call for restaurant closures.
Part of the problem is that the supply of restaurants continued to grow in past years, even when foot traffic didn’t. Between 2006 and the industry’s peak in 2014, the number of restaurants in the U.S. grew 7.3% to more than 638,000 — outpacing the 6.9% growth rate of the U.S. population over that period, according to NPD Group Inc., which studies eating patterns in the U.S.
The number of restaurants has since declined to just over 624,000, with many independent restaurants shutting their doors as chains continued to expand. Meanwhile, meal-kit delivery services, such as Blue Apron, and an expanded array of prepared meals available at supermarkets and convenience stores have been taking away customers.