Chain Restaurants

Chuck Salter has an interesting article in Fast Company (via Yglesias and Marginal Revolution) about the popularity of chain restaurants like Olive Garden and Red Lobster.

(from Flickr user Erik&Reny)

Readers of this blog know that I'm not much a fan of these types of restaurants. I think some chains are OK. I really like Chipotle. My favorite place for wings and beer back in Cleveland was a 14-store chain. I'm not necessarily against them in principle, so much as I am because they typically just aren't that good. Better alternatives often exist.

What's more interesting to me is how these restaurants are dispersed throughout metro areas. Look at the DC metro area. Sure, it has some chain restaurants in the city, but the proportion of chains to independents is much lower in the city than it is on the fringe in Virginia and Maryland.

This is generally the case in most metro areas, although the proportions differ from city to city. Why is this the case? Do people in cities not have the taste for these restaurants the way people in the suburbs do? Is it a case of economics?.. people in cities can afford nicer restaurants than chains? or independent restaurant owners can survive in cities where they couldn't in suburbs? I think it's a little bit of both, although I can't exactly pinpoint a hypothesis that I think is really compelling.


    On September 14, 2010 Anonymous said...

    The appeal of chain restaurants is that they tend to offer consistently fine food. In a metropolitan area, where there are so many restaurants that virtually every kind of food, from Italian to Mexican onwards, will be represented, there is less commercial space for a chain store to enter.


    Bethesda, Maryland, is a fine example of a suburb with a wide and diverse independent restaurant scene. Residents have the disposable income to spend on food and I believe residents have a culinary curiosity to support the wide variety of cuisines. The issue with culinary curiosity is that it's not something policy-makers can engineer. Remember, a lot of people today still think sushi is exotic!

    Also, Bethesda has a significant inventory of small, older retail spaces that provide rents that are reasonable enough for a budding restaurateur to start out. Bethesda is still pricey, but I think the demand may justify the rents.

    My guess is that in newer exurbs, much of the retail space is new and the leases were probably signed by chains with the patience, credit, and money to sign leases before the buildings were built.

    The major exception to all this lies in suburbs with large ethnic populations. In those places you will find independent restaurants mainly targeted within the ethnic community. Langley Park, Maryland, with its significant population of Salvadorans and Mexicans hosts many Salvadoran and Mexican restaurants.

    Since immigrants to the United States tend to go straight to the suburbs, it's no surprise that many say that the best Chinese, Korean, Salvadoran, etc. cuisine is in suburb X.


    I would guess it is something to do with density. Nobody is going to drive 20 miles to try some random Thai place, but they might go 20 blocks.


    I'm generally anti-chain but I have a friend that works for mega-chain umbrella and have to admit I was kind of impressed when she gave me the rundown on how all (most?) of the olive garden chefs go to Italy for training.

    I think that urban restaurant success has everything to do with the sidewalk. This is true for small operations of any kind and unbranded operations. When you can see people eating as you pass by and the food on their plates from a few away that gives you more confidence to go in and try it without having to rely on the brand name.


    Agree - density is the key here. Chains won't invest if the density is too low or the economic demographics don't make sense in a sparsely populated area. For similar reasons, many don't invest in cities with high population density. Most of these chains - Olive Garden, Red Lobster are surrounded by a lage parking lot - something they can't get in highly dense areas.


    From a Midwest perspective, I live in Lawrence, Kansas, but commute to Washburn University in Topeka for work. Lawrence has a great mix of both chain and independent restaurants -- though most of their independent restaurants are concentrated on a one block radius downtown. Topeka, so far as I can tell, is dominated by chains despite being the bigger of the two cities, so I won't necessarily argue that the bigger the city is, the more selection they will always have. Much of it has to do with demographics, patronage, city planning, and so on.

    I think the fact that the residents of Topeka are trying hard to improve both the downtown area and the city in general is helpful for encouraging growth of new and different restaurants, and there are some fine examples, but the growth of suburbia and the decline of downtowns everywhere mean that by default, chains are more likely to prosper.