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Thousands Of Independent Restaurants Are Closing As Chains Expand

The number of independent restaurants in the U.S. shrank by 7,100 between fall 2014 and fall 2015, new research shows.

Posted on March 9, 2016, at 1:54 p.m. ET

Jacob Ammentorp Lund / Getty Images

Americans are increasingly choosing chain restaurants over their independent counterparts, despite all the hype over locally-cultivated foodie-ism, new research shows.

Restaurant visits by consumers in the year ending December 2015 rose by 700 million compared to 2010, almost returning to pre-recession levels, research firm NPD Group found. Yet independent restaurants — which the researchers define as those with just one or two locations — are not seeing the benefit.

As a result, the number of independent eateries had shrunk by more than 7,100 last fall compared to a year earlier. Meanwhile, the total number of chain restaurants increased by more than 3,200, according to NPD.

The restaurant industry was hit hard by the recession and is just now recovering, said NPD spokeswoman Kim McLynn.

"Chains have been heavily investing in advertising and 'dealing' to drive customer traffic these past several years and independents don’t have the resources to compete," she said.

Wendy’s, for instance, has been offering a four items for $4 deal, and Burger King has an even cheaper five items for $4 promotion.

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The trend has affected fast food in particular, a segment where the number of chain restaurants grew by 1.5% as the independent fast food restaurant count declined by 2.2%.

Starbucks added 559 U.S. locations in fiscal year 2015. Both Taco Bell and Chipotle each added about 200 stores in 2015, and Dunkin' Donuts increased its store count by 349.

Still, even some of the big chains have struggled. McDonald's ended 2015 with 91 fewer U.S. locations than 2014, KFC shed 100, and Pizza Hut lost 41.

Justin Sullivan / Getty Images

Among full-service restaurants (those with waitstaff), both chains and independents experienced declines. Visits to quick service restaurants, which represent 79% of total industry traffic, were up 1%. But full service restaurant traffic, representing 21% of total visits, declined, according to NPD.

"The restaurant business is challenging and in the end it’s the survival of the fittest," said McLynn. But overall, she said, "dining out in the U.S. is alive and well."

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