Restaurants could race a reckoning this year

Nine percent of all full-service restaurant units could close this year, with most concentrated in the Southern U.S. Data analytics firm Black Box Intelligence says fast casual and quick service restaurants are growing rapidly, while casual dining closures outpace openings. Those at risk lost at least 30% in sales last year. Many of the at-risk areas also report high diabetes rates, which the report notes make them “a good proxy” for GLP-1 drugs, a trend that further exacerbates restaurant demand. “While no one in the industry is celebrating unit closures, there is a silver lining,” the report says. “Restaurant closures in a saturated market can mean a shift in traffic to other nearby units and improve financial results for those that remain.”