Best and Worst Places to Open a Restaurant

The Restaurant Growth Index, ranking the best cities to open your next unit

October 2014

Tourism remains the strong driver of restaurant traffic and opportunity. As the 2014 Restaurant Growth Index—compiled exclusively for Restaurant Business by Nielsen—shows, consumers continue to loosen their purse strings and indulge in restaurant dining while on vacation.

 

View the complete rankings

Tourism drives top markets in 2014 (article)

Insights from restaurateurs in top metro areas

How we rank the markets

5 best places to open a restaurant

Metro area Rank Sales per restaurant
Kahului-Wailuku-Lahaina, HI 1 $1,541,451.87
Las Vegas-Henderson-Paradise, NV 2 $1,483,252.64
Kapaa, HI 3 $1,301,842.79
Findlay, OH 4 $1,473,433.86
Sevierville, TN 5 $937,203.35

5 worst places to open a restaurant

Metro area Rank Sales per restaurant
Los Alamos, NM 917 $601,468.75
Sunbury, PA 916 $459,202.61
Boone, IA 915 $498,212.77
North Vernon, IN 914 $514,891.89
Malvern, AR 913 $537,621.62

10 largest metro areas

Metro area Rank Population Sales per restaurant
New York-Newark 712 19,985,109 $672,712.88
Los Angeles-Long Beach 447 13,204,080 $765,125.10
Chicago 516 9,557,430 $788,109.27
Dallas-Fort Worth-Arlington 505 6,887,537 $805,386.14
Houston-The Woodlands 639 6,352,744 $763,153.25
Philadelphia 776 6,049,157 $678,266.89
Washington 659 5,978,220 $918,975.66
Miami-Fort Lauderdale 352 5,860,668 $782,413.19
Atlanta-Sandy Springs 523 5,574,225 $759,458.25
Boston-Cambridge-Newton 625 4,694,099 $803,310.34
 

How we rank the markets

The Restaurant Growth Index is designed to help restaurants screen markets and find attractive areas for expansion and growth. The market rankings represent underserved areas that signal strong restaurant sales relative to the national average. The RGI ranks both metropolitan (core urban area population of 50,000 or more) and micropolitan (urban core of at least 10,000 but less than 50,000) areas. Each area consists of one or more counties encompassing the core urban area while integrating adjacent counties that have a high degree of social and economic similarities.

The RGI uses restaurant sales collected by the U.S. Census of Retail Trade and per-capita income reported by the U.S. Census Bureau and updated by Nielsen. Restaurant-location data comes by way of Nielsen through Infogroup. Sales figures conflate visitors and residents of each market. So, smaller markets that are tourist destinations with high transience and heavy through traffic tend to index high. Market size should be considered in addition to market rank in assessing opportunities for future restaurants. The RGI formula:

Note: The national average is 100. Higher scores signal better opportunities; scores dipping below 100 suggest weaker opportunities than average. Markets are scored as whole. All markets, when scrutinized at lower levels of geography (i.e., ZIP codes), show pockets of better and worse opportunities.

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