Read More About
Recommended For You
Sitting on the edge of the U.S.-Canadian border and taking a backseat to another, more cosmopolitan, Empire State city, Buffalo, New York, often falls into the background. The city’s beloved NFL team plays the occasional home game in Toronto, its intense winters freeze out Niagara Falls–bound tourists, and the City of Good Neighbors’ meat-and-potatoes character doesn’t incite a barrage of flashy adjectives.
For many, Buffalo fails the eye test. It seems a city lumbering along in the 21st century and a spot on the U.S. landscape few would peg for growth, let alone label an urban metropolis poised to welcome quick-service restaurants.
Take a closer look, however, and Buffalo’s restaurant-industry appeal is real.
“Most companies would look at Buffalo as a tier-two or tier-three market, but there’s plenty to like,” says Moe’s Southwest Grill president Paul Damico.
In 2005, Moe’s opened its first two Buffalo outlets. Today, the fast-casual Mexican eatery has five area restaurants, including one at the University of Buffalo, with three
additional locations on the horizon. Damico sees even more opportunity.
“You’ve got pockets of affluent areas and a metropolitan area that isn’t littered with competitors,” he says. “Plus we see a strong presence of health care, which can lead to great catering opportunities and a steady employment base.”
Among the nation’s largest metropolitan markets, Buffalo secured the top spot in this year’s Growth 40, performed by Pitney Bowes Business Insight, a Troy, New York–based company that helps retailers acquire, serve, and grow customer relationships. Combining data, such as the area’s restaurant landscape, with a forward-looking view including changes and projections in unemployment, retail sales, home price, and disposable income, the report identifies the nation’s top 40 markets (10 large, 15 medium, and 15 small) poised for quick-service growth.
|TOP 10 Large Markets||QSR Units||Population
Quick-service competition weighed heavily in Pitney Bowes’ assessment—and for a logical reason.
“There are only so many food dollars available. The more competitive the marketplace, the less share a quick-service restaurant can capture,” Pitney Bowes’ client services manager Lynda Bednarczyk says.
In terms of existing quick-service competition, Buffalo outshines its big-city rivals. With only 257 quick-service chains in the Buffalo area—the study only counted those chains with 25 or more units, bypassing an area’s independents or small chains—there are a whopping 4,367 people for every quick-serve outlet; among other top markets, the population-per-quick-serve often hovers near 3,000.
“Competition is one of the key factors influencing market desirability because it can have a significant impact on the ability of quick-service restaurants to be successful,” Pitney Bowes’ director of client services Al Beery says. “Buffalo clearly separates itself from the pack with its favorable population-per-quick-serve figure.”
Yet, Buffalo’s promising competitive climate fails to tell the whole story.
Health care and education, two stable employment sectors, continue to grow in Buffalo, spurred in large part by the University of Buffalo and the Buffalo Niagara Medical Campus. Last June, Forbes named Buffalo one of the nation’s top 10 places to raise a family, hailing its low cost of living and wealth of educational opportunities.
“When you combine the modest competition level with decent growth factors, as Buffalo does, then the city’s appeal and potential becomes clear,” Beery says, noting that Buffalo’s diversified, conservative economy is expected to withstand any additional recessionary fallout.
The second critical piece to Pitney Bowes’ report is its Growth Index, a past, present, and future look (from 2005 to 2014) at changes in unemployment, disposable income, retail sales, and home prices. Beery says a positive relationship exists between constructive changes in those four areas and quick-service sales growth.
“When retail sales, disposable income, and home prices go up with unemployment declining, then you’re looking at a positive opportunity for quick serves,” he says. “The more people available to patronize quick-service units, the better the situation for restaurants to make market headway.”