Restaurants, Bars, and Coffee Shops Power Retail Growth on Long Island
Across the country, food and beverage concepts are fueling retail real estate growth. From neighborhood coffee shops to national quick-service chains, these tenants now account for nearly 20% of all new leasing — a clear sign that consumers continue to prioritize dining out, even in the face of rising costs.
According to the U.S. Census Bureau, Americans spent more than $100 billion at restaurants and coffee shops in July alone, a 5.6% increase year-over-year and nearly 50% higher than pre-pandemic levels. Convenience, value, and evolving digital tools like mobile ordering and delivery apps are driving this sustained demand.
Quick-Service Restaurants Lead Expansion
The quick-service restaurant (QSR) sector continues to dominate. In 2024, the 50 largest operators added a net 2,722 new locations nationwide — nearly a 20% increase compared to the previous two years.
- Starbucks led the way, opening nearly 600 net new stores in 2024 and more than 1,600 since 2021.
- Krispy Krunchy Chicken is rapidly expanding through a store-in-store model within convenience stores and big-box retailers.
- Chick-fil-A continues to top performance charts, generating $7.5 million in average sales per unit — all while closing on Sundays.
Not all operators are thriving. Subway remains the leader in net closures, shuttering more than 600 locations last year. With average annual sales of just under $500,000 per store, its performance lags far behind the $2 million average across the QSR top 50.
Why This Matters for Commercial Real Estate
For landlords, investors, and developers, the message is clear: food and beverage tenants are a critical growth engine for retail centers. Municipalities and property owners alike are competing to attract high-performing brands like Chick-fil-A and Raising Cane’s, recognizing their ability to generate foot traffic and create a “destination effect” for surrounding businesses.
While the sector faces challenges — including labor shortages, rising food and wage costs, and changing consumer preferences — the overall trend is one of resilience. Consumers still see quick-service and fast-casual restaurants as offering relative value compared to full-service dining. That demand, paired with tech-enabled convenience, positions the category for continued expansion.
The Long Island Perspective
Here on Long Island, the food and beverage boom is transforming the retail landscape. Several trends stand out locally:
- Coffee and Quick Service Expansion: Starbucks and Dunkin’ continue to aggressively pursue new sites, with many new drive-thru formats catering to commuter traffic on major roadways like Sunrise Highway, Jericho Turnpike, and Route 110.
- Chicken Concepts in Demand: Chick-fil-A’s recent Long Island openings in Commack, Riverhead, and East Meadow have drawn major attention, with municipalities weighing traffic flow concerns alongside strong community demand. Raising Cane’s has also announced plans for regional growth, eyeing suburban corridors.
- Revitalizing Strip Centers: Fast-casual concepts such as Chipotle, Panera, and Cava are anchoring repositioned centers, often filling space left by traditional retailers. These restaurants bring steady foot traffic that benefits surrounding tenants.
- Downtown Dining Strength: Local bars, breweries, and coffee shops are anchoring revitalization efforts in downtowns like Patchogue, Huntington, and Farmingdale — creating walkable dining destinations that attract both residents and visitors.
For property owners, this creates a unique opportunity to fill vacancies with resilient, traffic-driving tenants. For communities, it reflects evolving consumer habits, where eating out — whether a coffee on the go, a casual lunch, or a night out with friends — has become a regular part of daily life.
NAI Long Island’s Take
At NAI Long Island, we continue to track these trends closely to help our clients identify opportunities. Whether you’re a landlord seeking strong tenants or an operator looking for your next location, understanding the role of food and beverage in retail real estate is essential to long-term success.
Key Takeaway: Food and beverage isn’t just about dining — it’s driving retail growth. On Long Island, aligning with this demand means tapping into one of the most reliable engines of consumer traffic and retail vitality.