USA | New industry research has revealed which US state is the most affordable for hospitality business owners to lease restaurant space.
Indiana has been named the most affordable state to lease restaurant space in the United States, according to new research from Alto-Shaam, commercial foodservice equipment and technology innovator.
To benchmark the relative affordability of leasing restaurant space across the US, Alto-Shaam analysed the average annual cost per square foot to lease restaurant space in each state, comparing it to local earnings to determine what percentage of the average annual salary would be required to cover lease costs.
Alto-Shaam's research shows that the annual cost to lease restaurant space in Indiana is USD 14.50 per square foot. This is the cheapest price of any US state overall and relative to local wages, and 78 percent cheaper per square foot than the least affordable state of New York.
Even in more relatively affordable states like Indiana, ongoing inflation has continued to pose significant challenges for foodservice providers across the nation.
Food and labour costs have increased by an average of 35 percent in the past five years in the US. While commercial kitchen entrepreneurs will find it useful to see where leasing affordability is better, there are several growing costs that threaten the tight profit margins of foodservices.
Kristina Bladecki, Director of Culinary at Alto-Shaam, commented on the challenges of finding ways to reduce costs.
"When operators are already tied up with leasing and startup expenses, they're faced with the need to cut costs, and the last thing they want to cut is the quality of food or customer experience,” she said.
"There are measures that restaurants can take to reduce expenses in the back of house. For example, using ventless technology instead of a traditional hood system can save on high running costs which can reach up to USD 20,000 per year, while still achieving the same results in the food served."
North Dakota was the second most affordable state, followed by Minnesota, Massachusetts, Connecticut, Oklahoma, Wisconsin, Illinois, Missouri and Maine.
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