City Ranks First for Food Entrepreneurs

Milwaukee is the most promising big city in America to open a restaurant, according to a recent study by Lending Tree.

The study examined the nation’s 50 largest cities to determine where new restaurateurs may have the best shot at success. Lending Tree used four factors in ranking cities and Milwaukee did very well.

Average restaurants in the 50 cities had monthly revenues of $262,961, compared to $350,784 for Milwaukee (the figures were adjusted based on prices in each city, to reflect the variable cost of living). Yet Milwaukee had only 709 restaurants per 100,000 households with incomes of $50,000 or more versus the 50-city average of 835, and 509 restaurants per 100,000 residents aged 35-54, compared to the average of 654 for the 50 cities. “Milwaukee diners may be hungry for a wider array of options,” the study suggests.

On the fourth factor, average payroll costs, Milwaukee also scored high (meaning costs were low), with an average annual payroll per employee of $14,510, versus the 50-city average of $17,314. Milwaukee had a final score of 82.5 out of 100. Slightly lower payroll costs placed Milwaukee above runner-up Cincinnati, which had a score of 78.4.

Five of the top-ten rated cities are in the Midwest or as the article calls it, “flyover country,” including Minneapolis, Kansas City and St. Louis. The developing dining scene in this region, with fewer restaurants per capita, paired with lower labor costs, make these cities more ideal for business owners. Many cities thought of as “culinary capitols” ranked the lowest on the list due to market saturation — many restaurants per capita. San Francisco ranked 49th with a total score of 24.8, while New York came in last with a 17.3 ranking.

Which suggest the toughest cities for restaurant owners might be the best ones for restaurant patrons. The changing scene in the Midwest and Milwaukee could be good news for customers.

The $799 billion in annual sales created by restaurants reflects America’s love of eating out, the study notes, but that doesn’t mean the industry is invincible. Lending Tree cites rising labor costs and changing consumer tastes and behavior as lead factors challenging restaurateurs’ current business models and sometimes leading to failures.

While business owners in Milwaukee face these same challenges, the study says that our market is “holding up.” Lending Tree acknowledges new restaurants opening in the area, but also notes multiple establishments have recently closed as well.

One issue may be a lack of skilled workers. “Restaurateurs in Milwaukee have a limited selection of culinary professionals, creating competition among business owners trying to fill cooking positions,” the article says.

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