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Restaurants, bars, coffee shops drive US retail market

Posted By: CoStar on September 10, 2025.  For more information, please click here to read the source article.

Restaurants, bars, and coffee shops are fueling the retail real estate market, accounting for nearly a fifth of all new leasing over the past year, as Americans spend record sums dining out despite higher prices.

New Census Bureau data shows consumers shelled out more than $100 billion at restaurants and coffee shops in July, a 5.6% increase over the past year and nearly 50% more than at the start of the pandemic, underscoring both the resilience of demand — as customers desire value and convenience — and the sector’s expanding footprint.

The largest 50 quick-service restaurants by total sales opened 2,722 more locations than they closed in 2024, a nearly 20% rise from 2022 and 2023, when there were about 2,300 net new stores. That’s according to Quick Service Restaurant Magazine’s annual report on the largest and fastest-growing of these U.S. eateries.

Leading the way in expansion for the third year in a row was Starbucks, opening a net new 589 locations in 2024. Starbucks has opened over 1,600 new locations since the start of 2021, 40% more than the second-fastest expander, Krispy Krunchy Chicken. The Louisiana-based restaurant operator has been rapidly expanding in convenience stores, truck stops, universities and big-box retailers throughout the country using a store-in-store model.

On the other end of the performance spectrum, things continue to look down for Subway, the leader in net restaurant closings for the fourth consecutive year. After closing 447 locations in 2023, Subway accelerated closings to 631 in 2024. Subway’s performance in 2024 is surprisingly not its worst year as it closed more than 1,000 stores in 2021. Unlike many quick-service restaurants, with both franchise and corporate-owned stores, Subway locations are exclusively franchised.

Recent closings at Subway have done little to turn around the company’s annual unit volume, or the amount of sales generated per restaurant, which held steady at just $495,000. For comparison, the average annual sales per location across the entire top 50 was just over $2 million.

Subway’s average store performance was far worse than that of any other restaurant operator except Krispy Krunchy Chicken, which does not operate out of standalone locations but rather operates a store-in-store model within convenience stores, trust stops, and big-box stores. The vast majority of restaurants with lower average unit volumes were either sandwich or pizza-focused, with these two segments accounting for six of the lowest eight performing operators on a sales-per-store basis.

On the opposite end of the spectrum, chicken and burgers drove the top sales generators. Chick-fil-a and Raising Cane’s topped the list with average unit volumes of $7.5 million and $6.5 million, respectively, while In-N-Out, Whataburger, and McDonald’s rounded out the top five, with each generating more than $4 million in annual sales per location.

Chick-fil-A’s performance is even more impressive when considering it is closed on Sundays and validates the hyper-competitive approach taken by many municipalities and landlords to attract the chicken cult-favorite.

A significant amount of these increases are due to rising costs, as the Consumer Price Index for food away from home has risen by 3.7% over the past year and a whopping 32% since the start of the pandemic. However, the remaining 17% reflects increased consumer demand, despite the eye-watering rise in menu prices.

While more expensive than they once were, consumers still associate quick-service restaurants with relative value compared to their more expensive full-service competitors. At the same time, enhanced adoption of mobile ordering and food-delivery apps has broadened the offerings available to those ordering food at home and brought customer dollars from the couch to the check-out line.

Despite strong performance and continued expansion, quick-service restaurants aren’t without challenges. Labor shortages, rising food and wage costs, franchisee profitability pressures, and shifting consumer preferences all pose headwinds.

Still, with value, convenience, and digital adoption on their side, quick-service restaurants remain well-positioned to continue to capture a growing share of consumer dollars.