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The turnover of Philly restaurants is high, but that doesn’t deter new spots from opening

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The Philadelphia restaurant industry has recently seen a few high-profile closures, including Hiroki, La Calaca Feliz, and the Lodge by Two Robbers. The restaurant business is notoriously difficult, and in the city it is no different.

Unlike other consumer retail businesses, such as fitness and apparel, the restaurant scene is unique in its volatility. “It's the cost of goods, it's the cost of labor, and it's the kind of standard profit margins, which are, in these types of economic environments, continually getting squeezed,” Jacob Cooper, partner at the retail brokerage MSC, said of the differences.

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“Even in the best circumstances, it’s still a pretty challenging, low-margin business, with a lot of volatility in the prices of food, rising cost of labor, fixtures, uniforms,” said Jonathan Deutsch, the director of Drexel University’s Food Lab.

According to the Center City District, 85% of Center City businesses open in 2019 are still open today. For restaurants alone, that number drops to 56%.

An Inquirer analysis of Philadelphia’s business licenses since 2006 shows that the median lifespan of businesses with a food preparing and serving license in the city is just seven and a half years. This is likely an overestimate for restaurants, as these licenses are also required for delis, schools, and medical facilities.

Philly is a food city with thousands of restaurants, but that turnover can lead to favorites disappearing, locations remaining empty, and neighborhoods ever changing. To see what that churn looks like, let’s go back over seven and a half years.

2018 Google Street View / 2026 Garland Fordice
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  • There were a little more than 8,000 active food preparing and serving licenses in Philadelphia in 2018. This number is slightly inflated because of changes made to the licensing process that year, causing some existing businesses to be issued a new license.

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  • Throughout 2018, around 1,000 new licenses were issued in Philadelphia, including for restaurants like El Merkury, Irwin’s, and Louie Louie – all three are still open.

  • Of those roughly 1,000 businesses, around 650 have since closed, including restaurants like Bourse Food Hall, the Bon Appétit-recognised Sarvida, and Ardiente, an Old City bar that reportedly took two years to open.

  • Here’s how one block in West Philadelphia represents the trend.

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  • On this block, part of the University of Pennsylvania campus, restaurants have come and gone over the last eight years. “Sansom Row” was added to the National Register of Historic Places in 1977, so while the buildings haven’t dramatically changed, the businesses within have.

  • Starting down the block in 2018, you would find Baby Blues BBQ, a West Coast barbecue spot opened by former Philadelphians in 2010. It closed in 2020, in anticipation of a move up the block.

  • The space remained empty until Masala Kitchen opened in 2025.

  • Next door is Avril 50, a shop that sells coffee, tea, chocolates, international publications, and more. It opened in 1984 and is still serving in 2026.

  • New Deck Tavern, one of the larger restaurants on the block, just celebrated its 40th anniversary.

    Mary Funchion, the owner of New Deck Tavern, said its long-term success is about consistency. “Here, people like to come back and it’s the same as when they went to college, the same as when they met their husband. … We’ll change the menu, we’re changing it up right now, but it’s pretty much the same, a lot of the same staff.”

  • The second restaurant that has lasted on the block is White Dog Cafe, which opened in 1983. On its website, it says it’s “the first restaurant in Philadelphia to utilize environmentally sustainable, organic, and locally sourced foods from farms within a 50-mile radius.”

  • In 2018, Federal Donuts occupied the building at 3428 Sansom St. This spot was the third location for Federal Donuts that opened during an expansion in 2014.

  • This Federal Donuts location closed in 2024, before the more recent announcement of other Federal Donuts closures, in which the restaurant group cited a slowdown in the fast-casual lunch business. Puyero Venezuelan Flavor on Campus opened later in 2024 and remains there today.

  • Then, we have Bernie’s Restaurant & Bar, originally a Montgomery County pub that was expanding to new locations, which opened in 2018.

  • Bernie’s, which also had a location in Manayunk, closed in February 2020 after two years. Baby Blues BBQ from down the block briefly moved into the space until closing in 2022.

  • As of August 2026, the restaurant space was not occupied by a tenant.

  • This block shows how quickly things can change, but also how restaurants can survive for decades.

COVID-19 also added additional pain to the restaurant industry, causing an increase in closures and a decrease in openings.

New food licenses are outpacing closures in Philadelphia.

The number of closures and openings is based on initial start dates and end dates of restaurant business licenses.
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It has also changed the behavior patterns of customers, specifically the lunch crowd. “We had double the amount of staff every day during the week than we do now because the lunches aren’t the same,” Funchion said.

“It’s a low-margin business. We no longer have a great lunchtime dining culture because I don’t feel like folks have fully returned to office,” Deutsch said.

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Starting in 2022, new permits started to return to pre-COVID numbers, and there is optimism in the continued recovery of businesses.

According to the Center City District State of the City 2026 report, Philadelphia is the third-largest residential downtown in the country and retail occupancy reached 84%.

“I think you can point in Philadelphia to this kind of always, consistently percolating entrepreneurial spirit in the food world, like this is a food town, and there are always people here that want to be creative, take risk, open, and do something different,” Cooper said.

In fact, dozens of restaurants are set to open this fall.

Methodology

We used Philadelphia Department of Licenses and Inspections business license data to identify restaurants. We specifically looked at “Food Preparing and Serving” and “Food Preparing and Serving (30+ SEATS)” licenses. To determine the median license duration, we looked at licenses that started after 2005 through 2025, because the department transitioned to a new system in 2004, which affected initial start dates of licenses before the transition.

In 2018, L&I made a change to certain license structures that resulted in new licenses to differentiate between restaurants with a 50- and a 30-seat capacity, which could have affected some of the initial license dates. “The purpose of this restructuring was to assist in our ability to see which establishments would be eligible for a liquor license. This was accompanied by significant joint enforcement between L&I and the health department,” said Kandyce Stukes, communications manager at L&I.

To account for license changes for the same locations, we combined licenses that were listed for the same business name at the same location.

According to L&I, less than 5 percent of data are incomplete, so when we encountered incomplete entries we omitted them.

Staff Contributors

  • Design and development: Garland Fordice
  • Editing: Sam Morris and Julie Busby
  • Copy Editing: Addam Schwartz

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