Though it’s difficult to run a successful business in any city, New York restaurateurs pride themselves on just how inhospitable the hospitality industry is in the five boroughs. Though the city famously has some 24,000 restaurants scattered across its 304 square miles, that number is constantly mutating, with new business opening and closing ad infinitum. Though the phrase “if you can make it here, you can make it anywhere,” might sound like a tired cliché, the sense is that Frank Sinatra line holds especially true for the city’s food industry.
Still, just as the rest of the country challenges New York’s claim as the mecca of basketball, or the birthplace of rap, the question begs asking: Is owning a restaurant in the five boroughs really more expensive than operating a similar business in other booming U.S. cities?
To help answer this age-old debate, the New York Times dug into the data, speaking to a market research firm called the NPD Group that tracks consumer spending. Comparing Manhattan and Brooklyn’s competitive restaurant industry to California’s “gold-rush dining scene,” the Times pit New York City against Los Angeles and San Francisco, breaking the analysis down into four categories: real estate, labor, food, and “the bottom line.”
According to the Times, a “healthy” restaurant aims to spend 30 percent of its sales revenue on food and beverages, 10 percent on rent and utilities, and another 30 to 40 percent on labor expenses. All of these numbers should total roughly 75 percent of a restaurant’s projected sales, leaving room for other incidental expenses and a 10 percent profit margin.
Armed with these numbers, which should hold true across the restaurant industry as a whole, here’s what the Times found coast to coast.