The chain restaurant industry has largely recovered from the pandemic in a variety of ways, notably sales and location count. But it has yet to recover in one key metric: Actual customers.
That’s at least based on an analysis of Technomic Top 1500 data along with population estimates from the U.S. Census and inflation data from the U.S. Bureau of Labor Statistics. Taken all together, they point to an industry that is fighting over a dwindling number of actual visits.
The Top 1500 accounts for the bulk of the chain restaurant industry, making it a proxy for the industry.
The number of locations on that list has risen by 3.9%. That’s lower than the 4.6% growth in the population over that time. So the number of Americans per restaurant has actually increased slightly, by about 10 people, since 2019.
Sales per restaurant on the Top 1500 has increased 24.2%. The average restaurant generated about $1.79 million in sales last year, up from $1.44 million in 2019. Unfortunately, menu prices have increased 31% over that same period. That means the average restaurant gets about 7% fewer customers than they did in 2019.
This data alone should illustrate the challenge in the industry in 2025. Consumers are spending more at restaurants, but they are visiting less often. This makes them angry, which explains much of the pushback we’re seeing on social media over prices.
Operators have to work harder than ever to get more visits. They are lowering prices or offering discounts. They are offering a record number of limited-time offers. And they’re unleashing partnerships with companies like Netflix, Nickelodeon and Minecraft.
To be sure, a lot of restaurant chains closed locations during and after the pandemic. Bankruptcies and other issues cleared a lot of locations, including burger chain franchises, buffet brands and casual-dining locations.
Yet many of these were replaced by growth from existing brands and the emergence of high-growth concepts such as drive-thru beverage or fast-casual chicken chains. It’s at least somewhat surprising that the industry has been able to nearly catch up with population growth given the decline in locations in 2020.
The industry’s constant push for unit growth, however, can also be its undoing, because it’s putting a growing amount of pressure on individual locations. Industry profitability remains down, on average, since the pandemic. Franchisee profitability is down, too. And all this has been during a period of generally strong economic growth.
The industry’s growth and decline has also altered the makeup of the chain industry. Unsurprisingly, it’s a lot more limited-service—and a lot more fast-casual—and a lot less full-service.
Overall, limited-service restaurant count increased by 5%, while full-service fell by 5%. But because there are more limited-service restaurants, period, there are more restaurants. Indeed, 88% of chain restaurants are now limited-service, up from 87% five years ago.
The bulk of the growth has come among fast-casual chains, which have grown location count by 19% over the past five years. Casual-dining restaurant count is down 4%, and family-dining is down nearly 7%.
Interestingly enough, the closures of those casual-dining restaurants could be easing pressure on those concepts, at least when it comes to same-store sales and traffic.
This year we’ve seen several full-service chains rebound strongly despite an otherwise unfriendly environment for restaurant sales. A lot of that is due to customer perception of their value. But at least part could be due to simple supply: There are fewer full-service locations to go around, at least on the chain restaurant side.
On the other hand, there are more limited-service restaurants today than there was last year, and certainly five years ago. As consumers cut back, they’re going to take the brunt of the impact.