North Carolina's population boom: what it means for restaurants

North Carolina has been one of the fastest-growing states in the country for years, and for a restaurant owner that is both a gift and a warning. More households mean more diners, but they also mean new competitors, higher rents and a tight labor market. Here is what the Census Bureau's population estimates for the state, Wake County and Mecklenburg County mean for restaurants.

How fast is North Carolina growing?

The Census Bureau publishes yearly population estimates, and they show North Carolina among the fastest-growing states, with growth concentrated in metro and suburban areas while many rural counties lag or lose people. Domestic migration from other states has been a major source of growth. For a restaurant, the point is that demand is rising unevenly: some towns gain households quickly while others do not.

Where is the growth?

Wake and Mecklenburg counties lead. Each is home to a very large number of residents and adds many more each year, among the biggest numeric gains of any county in the country. The Charlotte and Raleigh-Durham metro areas keep growing, and counties around those cores, such as Johnston, Union, Cabarrus and Durham, are growing quickly too. Look up the latest county figures on the Census Bureau's site, and check the year printed on the table.

What does growth do for restaurant demand?

It adds customers, and not only residents. Newcomers eat out more than long-time residents while they learn the area, because they have no established routines. Growth also brings jobs, and with them lunch trade, catering and meetings. New suburbs are underserved in the first years, and a good restaurant there can build a loyal base quickly. In established neighborhoods, growth lifts traffic and sales, but also prices.

What does growth do to competition?

It brings it. Chains and restaurant groups expand fast into growing areas, with money for prime sites and large marketing budgets. New independent restaurants open too, drawn by the same population numbers. When a new shopping center opens near you, expect three or four restaurants in it. Your response is to be clear about what you do better: a particular dish, a welcome, a price, a convenient location or a family history. Growth does not guarantee your sales will rise; it guarantees more choices for your guests.

What does it do to rent and labor?

Rents rise in growing areas, and landlords raise them when leases renew. Check your lease dates and read the renewal terms before a boom pushes them up. Wages rise too, because workers can choose among many employers, and housing costs push workers to live farther from the city. Hiring, training and keeping staff takes more effort. Offer stable schedules, meals, clear paths to promotion and prompt pay, because turnover costs more than a modest raise.

How do you serve newcomers?

Make it easy to find you and to understand you. Newcomers search online, so keep your listing and menu complete. Explain regional dishes on the menu: a stranger to North Carolina may not know the difference between eastern and Lexington barbecue, or what a meat-and-three is. Offer a welcome to nearby apartment complexes and employers. Hold a neighborhood night. People who move often want a place to meet others, and a restaurant can be that place.

What are the risks?

Growth can slow, and it already is slowing in some states. Overbuilt shopping centers can lose tenants. A restaurant that signs a long lease at a peak rent can be caught by a downturn. Plan for slower growth by keeping debt modest, building a base of regulars and having a flexible lease or an exit clause. Watch building permits, school enrollment and traffic in your area, because they show what is coming.

Use the data you can get for free. The Census Bureau's tools show population by county and town, the state demographer publishes projections, and local planning departments list approved subdivisions and shopping centers. A short call to the planning office can tell you how many homes are approved within three miles of your door and when they will open. Compare that with the number of restaurants already there. If the ratio is rising fast, differentiate; if it is falling, consider whether a second location or a longer lease makes sense.

Remember that growth is uneven across a metro area. A booming suburb can sit next to a neighborhood that is losing residents, and a statewide average hides both. Treat the headlines as a prompt to look at your own street.

Do you want the new neighbors to find you before they find the chain?

Mosey is a food-first app where diners search by dish and mood, rate what they ate and keep lists of places they want to try. For a restaurant in a fast-growing area, that means newcomers can discover you by the dish they are craving, and the ratings from other guests tell them what you do best. Mosey also gives your business its own page and list of regular guests, so the new neighbors who love your food become your regulars.

More guides for your business:

• North Carolina ABC permits and the 30 percent food rule for restaurants
• Planning a North Carolina restaurant around mountain and coast seasons
• North Carolina prepared food taxes in Wake and Mecklenburg counties

More in the US guides for food businesses.