New York restaurants face worst quarterly decline in 36 years

New York State saw a net loss of 1,928 restaurants and bars in the first quarter of 2025, marking the worst quarterly decline for the sector in 36 years. According to the Bureau of Labor Statistics (BLS), this loss exceeds any quarterly decline recorded during the COVID-19 pandemic. This represents the fourth consecutive quarter of contraction, the longest downward trend since 2021.

The metropolitan area, including New York City, Long Island, and New Jersey, was the hardest hit. The Manhattan Chamber of Commerce reported that this region lost 491 establishments in the first half of the year, the highest number in the country, with 117 closures occurring specifically within New York City.

Rising operational costs are cited as the primary driver of the crisis. In 2025, employee health insurance costs for New York City service companies rose by 12.9%, business insurance increased by 7%, and utilities such as electricity and water rose by 8.5%. These combined increases outpace the national average, creating a situation where rising expenses are not being offset by an increase in customers.