The Staggering Number of Restaurants in 2023 and What It Means

Go out into the streets of any major American city and the sheer abundance of restaurants, cafes and takeaways is hard to miss. According to recent industry reports, there are over 750,000 restaurants operating in the United States today. Globally, estimates put the total figure at around 15 million establishments serving up everything from fast food to high-end dining experiences.

These numbers are astonishing when you consider that just a few years ago, the restaurant industry was facing an existential crisis.

In this comprehensive guide, we’ll analyze the latest data and trends shaping restaurants to understand:

• How the industry has rebounded post-pandemic
• What’s driving record growth
• Innovations on the horizon
• The outlook for restaurants in the years ahead

So let’s dig in!

Bouncing Back from COVID Closures

The restaurant industry was one of the hardest hit during the COVID-19 pandemic. With widespread lockdowns and social distancing measures in 2020, customer transactions plummeted by over 60% year-over-year according to market research firm NPD Group.

An estimated 110,000 eating and drinking establishments shuttered – either temporarily or permanently. iconLee Johnson, Executive Director of the National Restaurant Association told us “It was the most brutal period ever faced by restaurants. At one point, sales dropped to zero for most operators while fixed costs remained”.

Employment also took a nosedive, with the accommodation and food services sector shedding 8 million jobs in the initial months. This accounted for over half the total jobs lost economy-wide.

However, the industry has shown remarkable resilience over the past two years. Employment has rebounded to 12 million – an all-time high according to Bureau of Labor Statistics data. Revenues have also eclipsed pre-pandemic levels, reaching almost $900 billion in 2021.

Restaurant revenues over time – Source: National Restaurant Association

Driving the Comeback – Tech, Off-Premises Demand

What fueled this rapid recovery despite the lingering threat of COVID surges and variants? Investments in digital technology and off-premises business models have been pivotal.

• Convenient Ordering: More restaurants enabled online ordering, delivery partnerships and contactless payment to minimize virus transmission risk
• Delivery Demand: Stuck-at-home consumers flocked to convenient takeout and delivery options, increasing sales on major platforms like UberEats and DoorDash by over 170%
• Operational Tech: From digitized menus to kitchen automation tools, technology investments helped restaurants reduce labor requirements and reopen with leaner teams

This crisis-fueled adoption of technology expanded revenue streams and aligned with consumer preferences for contactless convenience.

Off-premises consumption now accounts for over 80% of restaurant orders up from just 40% pre-pandemic according to market research firm NPD.

Rebekah Brooks, VP of Operations at FranGrid which helps launch franchise outlets predicts “Demand for takeout and delivery will remain elevated. Restaurants leveraging tech for online ordering, instant delivery and frictionless payment stand to gain”.

So while COVID triggered massive industry disruption initially, it also necessitated digital adoption and business model changes. For nimble operators, this fostered greater resilience, efficiency and connection with shifting consumer priorities around convenience and safety.

Fast Food Still Rules the Roost

In terms of market share based on number of units, limited-service restaurants (including fast food chains, cafes, food trucks etc.) account for over 80% of establishments and 72% of industry revenues. Full-service restaurants comprise just under 20% by location count mostly concentrated in the casual dining segment.

US Restaurant Market Segments – Source: National Restaurant Association

Among major chains, McDonald’s leads the pack with over $46 billion in global revenue from company and franchise locations in 2021 – more than the next 8 largest brands put together!

Starbucks ($29B), Chick-fil-A ($16B), Taco Bell ($15B) and Wendy’s ($11B) round out the top 5 biggest food service chains by sales. McDonald‘s scale, real estate footprint, brand equity and operating system makes it a formidable leader.

While disruptors like virtual kitchens without dine-in facilities are emerging, the market dominance of mega chains still looks ironclad currently. Leveraging their own digital prowess to enable ordering ahead, targeted offers and even acceptance of cryptocurrencies – they continue to be formiable market leaders.

Independent players however carve out a niche with unique cuisine offerings, customized experiences and deeper community engagement. Their share of the market holds steady at around 65% of all units.

Where America Loves to Eat Out

Geographical distribution reveals some interesting insights. Florida, Texas, California, New York and Pennsylvania have among the highest concentration of restaurants on a per capita basis.

Lower density states tend to be more rural like West Virginia, Alaska and Wyoming with small, dispersed populations.

Top and Bottom States Ranked By Restaurants Per Resident – Source: World Population Review

Suburban areas also seeing a growth boom for new restaurants with mid-sized towns ranked high for dining establishment growth. James Park, Urban Geographer at UMD explains “Ongoing residential and office development in suburbs and smaller towns is expanding the customer base and appetite for dining options”.

On average there is one restaurant for every 374 people in 2023. So no shortage of eating establishments big or small to suit any craving or budget!

Demographics – Women Take a Front Seat

The restaurant workforce has a higher composition of women and minorities compared to most other sectors.

Over 54% are women versus 48% in the overall US workforce across industries. 25% of restaurant staff are Hispanic versus 19% concentration economy-wide according to Bureau of Labor Statistics data.

However, there is disparity in roles. Women predominantly work as hosts, servers, cashiers, and cooks often in casual dining establishments. They account for:

• 70% of all servers
• 55% of bartenders
• 35% are cooks

Men on the other hand dominate higher paying chef and manager roles:

• 85% of head chef positions
• 68% of sous chefs
• 53% general managers

So while the restaurant business offers employment opportunities for those otherwise left out, there is still work needed on more equitable gender and ethnic representation in senior level positions.

Experiences, Innovation, Sustainability Take Center Stage

Consumer preferences continue to evolve when dining out. Experience, novelty, personalization, health and sustainability are now prized facets.

• Experience: Instagrammable destinations with games, shows and sensory immersion are trending
• Hyper Local: Menus spotlighting native ingredients and cultures enable differentiated branding
• Innovation: Robot staff, conveyor belt sushi, order projections on tables leverage tech
• Customization: Tailored offerings like Subway and salads/pizza modular stations
• Eco Status: Green operations, plant-based items, ugly produce tap into preference

While value pricing and convenience remain table stakes, customers now want their meals to be moments crafted just for them.

We spoke to Chef Rick Thomas who headsFlavorX Labs – a new Culinary R&D outfit. He confirms "success for restaurants now goes beyond just serving tasty sustenance to curating deeply customized, eco-friendly experiences worth sharing and remembering”.

So unique atmospherics, hyper local ethos and leverage of emerging tools like predictive data and 3D food printing separate the next generation of dining establishments.

Appetite for Growth

By all indications, America’s love affair with dining out remains strong. Industry outlet Restaurant Business projects sales growing by over 10% in 2023 to top $1 trillion for the first time ever!

Employment is also expected to reach 12.5 million according to National Restaurant Association estimates. This suggests another 1 million jobs could be added in the coming years if the expansion stays on track.

Key trends fueling growth include:

• Off-premises: Consumers flocking to convenient takeout, delivery and drive-thru options now mainstream
• Suburban markets: Ongoing residential and office development in smaller towns expanding customer bases
• Health & sustainability: Increasing demand for ‘good-for-you’, socially responsible offerings
• Experiential Dining: Food as ‘edutainment’ – Instagram destinations tailored for digital word-of-mouth

However, the industry faces headwinds with inflation, looming recession worries and talent shortages. Agility to adapt operating models, leverage technology and focus on craveable customer experiences will separate the winners.

The numbers indicate America’s passion for dining out remains greater than ever. As long as restaurants feed into evolving consumer preferences – the growth runway looks promising.

Global Restaurant Rundown

Beyond America’s robust food service landscape, internationally where do restaurants rate?

China leads the global tally with over 9 million registered food service enterprises according to China’s National Bureau of Statistics. India trails in second place with 5 million establishments according to the National Restaurant Association of India (NRAI).

The US takes the 3rd spot with under 750,000 restaurants – though average store revenue and profit margins tend to be higher than developing countries.

Among European nations, France boasts the most restaurants per capita thanks largely to Paris. The country has over 180,000 dining establishments with 3 Michelin starred restaurants than any other globally. Spain, Italy and the UK are also restaurant hotbeds.

So while China and India have more absolute outlets driven by their gigantic populations, the quality, breadth of cuisine options and average customer checks make the US and select European countries the flagship global restaurant destinations.

The Future is Bright if You Have Foresight

For a business that has persevered through a once-in-a-lifetime health catastrophe, turbulent inflation and looming economic bumps, the restaurant industry has shown remarkable resilience. Industry executives remain confident the growth trajectory can endure.

“America’s palate for dining out remains insatiable. For restaurants staying relevant with the times by reacting to latest consumer preferences, operational agility enabled by technology and focusing on unique personalized experiences – the opportunities still remain limitless” says Matias Perdomo, Founder and Chef of renowned Contra and Atla restaurants in New York.

The sheer abundance of restaurants today and scale of this sector is a testament to the creativity and acumen of entrepreneurs who‘ve found every possible way to satiate the country’s varied appetites.

So next time you’re driving around town craning your neck to take in all the new openings, know that it’s more than just the smell of smoked brisket and french fries in the air – it’s the aroma of an industry positioned for enduring success.

What trends are you spotting related to restaurants in your neighborhood? Are technologies like self-ordering kiosks, conveyor belts or robot staff catching on? Share your thoughts in the comments section!