RGI rankings on top locations for new restaurants

The Restaurant Growth Index is back—and it knows where you should put your next unit.

By Tom Spencer

What’s the best place to open a new restaurant? You’d do worse than heading to a hot tourist destination. Eight of the Top 10-scoring markets in the 2007 Restaurant Growth Index are vacation spots, including Myrtle Beach, South Carolina, which has held the top spot for five years running. Of the top 25 ranked metro areas with populations of 100,000-plus, 18 are driven by tourism dollars.

College towns aren’t shabby either. Seven ranked in the Top 25 growth markets, with two in the Top 10: No. 7 Owensboro, Kentucky, (Western Kentucky University) and No. 8 Valdosta, Georgia, (Valdosta State University).

But the best way to use the RGI isn’t to simply choose an area by rank. Myrtle Beach ranks high because it’s a very small market with a very big influx of outsiders.

So how do you use the RGI? Look at the ranking and the size of the market and then decide which metro areas represent the most opportunity for your particular concept. The RGI figure for each of the 363 metro areas provided here is calculated to a national average of 100, which means the higher the RGI over 100, the more opportunity there is. We worked out those numbers by looking at how much money people spend at restaurants as a percentage of their income; then we compared that to national averages.

As for restaurant sales figures, they’re estimated based on the 2002 Census of Retail Trade compiled by the U.S. Census Bureau. It is updated to 2007 by accounting for changes in business sales activity each year using wage and employment data from the U.S. Bureau of Labor Statistics and local sales tax data. The sales figures do not distinguish between in-town and out-of-town residents and therefore the sales generated in the market by out-of-towners increases the sales per capita and the resulting sales as a percentage in per capita income measures (again, that’s why Myrtle Beach scores so high).

And here's the info (in PDF):

The full RGI rank.

The best places to put a restaurant in the West.

The best places to put a restaurant in the South.

The best places to put a restaurant in the Midwest.

The best places to put a restaurant in the Northeast.



Tom Spencer is Vice President, Integras Client Service. Integras is the analytical services division of Claritas, a Nielsen Company, which provides all the data for the RGI.