Few industries appear to have survived better the health crisis plaguing the restaurant industry than the Chinese

Few industries appear to have survived better the health crisis plaguing the restaurant industry than the Chinese. About 85 percent of all new restaurants in the U.S. opened in 2016, compared with a 7 percent contraction in 2015. The number of food preparation sites in the country also rebounded. The number of construction sites went from 215,000 in 2012 to 224,000 in 2015 to 268,000 in 2016. U.S. Restaurant News’ end-of-year analysis estimated that roughly 44,000 new restaurants opened in 2017 compared with 38,200 openings in 2016, a 12 percent gain in openings.

According to analysts at Barclays, 4 percent to 5 percent of all restaurants last year – almost 900 more places to eat – were never opened. The bulk of them appear to have been causal closures that resulted from the flu, not closures tied to austerity measures, weak business, or difficult economic conditions, said John Gordon, principal of Pacific Management Consulting Group, a restaurant consultant.

That positive growth has lifted costs of operating a restaurant, particularly for franchisees, as they struggle to stay afloat. Now they’re finding creative ways to cut costs. They’re doubling up on items such as ice cream, discounting for labor and insurance, and looking to drive business to cheaper areas in their cities and suburbs. Some restaurants have found it cheaper to lease space rather than own it and utilize revenue sharing agreements instead of traditional leases. Others have placed new menus on tables and are offering a la carte items at their full menu prices.

Other tactics are being used to deal with challenges. Franchisees are fighting through labor shortages by offering lower prices and shifting wait staff to other parts of the kitchen.

That response probably won’t last long if attrition increases and suppliers get jittery. But Gordon remains optimistic that after a few tough years, the restaurant industry can do what it does best: face the sun and get out there and eat.

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