Special Report

Best Big Cities for Small-Town Restaurants

Big chain restaurants may dominate the dining scene both nationally and regionally, especially with their advertising clout. But smaller establishments in cities and towns draw in patrons, too. In many metropolitan areas, local restaurants thrive with a loyal following cultivated over many years. Residents know the owners and feel more comfortable in a neighborhood setting where the food and atmosphere reflect the locale more so than at a cookie-cutter national chain. (These are the most successful restaurant chains in America.)

Chains and local spots have something in common, though: Both have been hit hard by the pandemic. The National Restaurant Association estimated restaurant industry sales plunged to $799 billion in 2021, a decrease of $65 billion from pre-pandemic 2019. The industry lost a million workers in 2021 compared to 2019. And 90,000 restaurants closed permanently or temporarily due to the pandemic. (Check out the saddest restaurant closings in 2021.)

Yet while national chains get a lot of publicity, most restaurants are small businesses. According to the NRA, nine out of 10 dining places have fewer than 50 employees. Seven in 10 are single-unit operations, meaning it’s a local restaurant and definitely not part of a chain.

To determine the cities with the most local restaurants, 24/7 Tempo reviewed data on restaurant employee counts from the U.S. Census Bureau’s 2020 County Business Patterns. Metropolitan statistical areas were ranked based on the percentage of restaurants and other eating places that have fewer than 10 employees. While chain units might have 10 or fewer people working at any one time, they almost always have at least two or three times that many on payroll to cover shifts and prevent the staff shortages that can result from the rapid turnover chains often experience.

Data on average annual restaurant salary was calculated using annual payroll and employment data from the 2020 CBP. Data on median household income came from the U.S. Census Bureau’s 2020 American Community Survey and are five-year estimates. Only metropolitan areas with at least 500 restaurants and other eating places were considered. 

Data on average annual restaurant salary was calculated using annual payroll and employment data from the 2020 CBP. Data on median household income came from the U.S. Census Bureau’s 2020 American Community Survey five-year estimates. Only metropolitan areas with at least 500 restaurants and other eating places were considered. 

Click here to see cities with the most local restaurants

In each of the towns reviewed here, local establishments account for nearly half, half, or more than half of the restaurants. The town with the largest percentage of local dining venues? The seaside resort town of Ocean City, New Jersey, where nearly 82% of the restaurants are small, local affairs.

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