Fast food chains growth is largest in the sector

Andrey Kamenov, Ph.D. Probability and Statistics

As we continue our study of the business patterns in different U.S. industries, we now focus on the accommodation and food services sector. The major share of all businesses in this industry is restaurants, both full-service and limited-service. The latter, according to the North American Industry Classification System, are restaurants in which patrons order at a counter and pay before eating. Most of these are fast food chains.

While the sector as a whole has experienced substantial growth during the recent years, the growth in accommodation businesses has been the slowest, followed by full-service restaurants at a 20 percent increase in 12 years. Full-service restaurants are the only sector of all three that showed positive (albeit small) growth in every year, even 2008 and 2009.

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On the other hand, the number of limited-service restaurants increased by 32 percent during the same 12 years.

If we look at the relative change in the number of establishments by state, we see that this data is heavily influenced by changes in population. For example, the state with the most significant growth in accommodation businesses is Texas. By 2012, the number of hotels and inns in Texas had increased by more than 40 percent.  But Texas is also one of the states with the largest population change in the same 12 years.

To counteract this, we use the relative change in the number of businesses per resident instead. By this metric, the change in Texas is only 8 percent, smaller than in neighboring Louisiana and Oklahoma (in which increases of around 20 percent were registered). Some states, like Wyoming, Nevada and both Carolinas, have shown a significant decrease in the number of accommodation businesses.

The number of limited-service restaurants per resident, on the other hand, has increased in all but four states. Large surges were registered in Maryland (43 percent) and New York (48 percent), but the state with the most significant growth in the number of fast food restaurants is Washington, D.C.: a 58 percent increase.

Source: the US Census Bureau’s County Business Patterns data

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About Andrey Kamenov

Andrey Kamenov, Ph.D. Probability and Statistics

Andrey Kamenov is a data scientist working for Advameg Inc. His background includes teaching statistics, stochastic processes and financial mathematics in Moscow State University and working for a hedge fund. His academic interests range from statistical data analysis to optimal stopping theory. Andrey also enjoys his hobbies of photography, reading and powerlifting.

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