Chain expansion is killing off the independent restaurant

It's tough time to be an independent restaurant owner.

The number of indie restaurants in the US shrank by 7,100 between 2014 and 2015, a new research finds. And it's not because diners aren't eating out as often. The number of restaurant visitors jumped 700 million from 2010 to 2015 -- that's basically at pre-recession figures.

So where are all the diners gone?

Answer: Chain restaurants.

Chain restaurant expansion has bloomed 3,200 from fall of 2014 through fall 2015, according to the NPD Group, a research firm. So for every chain restaurant opens, more than two indies die.

Not even the Millennial Generation with all their food photos seem to be enough to keep the indies afloat. According to NPD, the main difference between chain success and indie failure is marketing and advertising.

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.
— Kim McLynn, NPD spokeswoman

While the economy has improved since the Bush administration, the hardships are still fresh on everyone's minds. People want to eat out more, but they're also keeping a sharp eye on their wallets.

Fast food restaurants have seen the biggest change. Chain fast food vendors grew at 1.5% while indie fast food restaurants fell 2.2%. Fast-casual restaurants saw the biggest increase at 5% year over year.

The 2 percent decline in independent restaurant units sourced to both the quick service and full service segments. The higher concentration of independent units, however, is in the full service segment, which includes casual dining, midscale/family dining, and fine dining. Most of the full service unit declines were in the casual and fine dining categories, and in the quick service segment the sandwich/Mexican-type restaurants had the steepest unit decline.
— NPD press release

If independent restaurants want to compete against the goliaths of the industry, they're going to need to think outside the box in terms of marketing and advertising. They'll need to use every resource at their disposal and get creative to drive customers into their seats.

Good service and good food will keep them coming back if money isn't an issue. But if budget continues to be a concern, price is going to continue to be a sticking point for diners.

The good news is that diners are spending more on eating out than on groceries. So how are you going to get a slice of that pie?