Despite the booming U.S. restaurant industry, Korean American restaurant owners in Los Angeles are reporting some of the toughest times in recent memory.
“I can feel the drop in sales every day,” said K, who has run a Korean restaurant in Koreatown, Los Angeles, for 20 years. “I’ve been through a lot, but I’ve never seen customer traffic fall off like this.”
While national statistics show record-high dining revenue, the lived experience for small restaurant operators—especially in ethnic enclaves like Koreatown—tells a different story.
According to the National Restaurant Association, U.S. restaurant sales are projected to exceed $1.5 trillion this year, the highest on record. The U.S. Census Bureau also reported a 5.3% year-over-year increase in food and drink establishment sales in May.
But industry analysts say that growth is largely driven by franchises. Chain restaurants, with stronger access to capital and better delivery infrastructure, have bounced back quickly since the pandemic and are now aggressively expanding into spaces once held by independents.
In 2024, the number of franchise restaurants grew by 2.2%, and a group of 50 emerging franchises (those with fewer than 200 locations) saw an average revenue increase of 35%.
In contrast, independent restaurants continue to struggle with rising rent, labor, and ingredient costs. A report by the Los Angeles Times last year highlighted the closure of more than 70 popular restaurants in the city, underscoring the vulnerability of small businesses.
Korean restaurants in Koreatown are feeling the impact. “It’s hard to name a single restaurant here that’s really doing well,” said C, who owns multiple establishments in the area. “Some owners say this is worse than the financial crisis or even the pandemic.”
Ryan Oh, a Korean American broker with CBC Wilshire Property, said many restaurants that managed to survive the pandemic through grants or loans are now shutting down due to persistently low sales.
Soaring costs remain the top concern. Unlike large chains, small restaurants often cannot absorb increases in overhead and are forced to raise menu prices.
P, an office worker in Koreatown, said, “I used to eat out all the time during lunch, but now it costs over $20 with tax and tip. I’d rather just bring my own lunch.”
Managers at Korean restaurants also say they’ve seen a clear shift in consumer behavior. “Before, customers were willing to pay more if the food was good. Now some walk out as soon as they see the prices,” one manager said.
Adding to the downturn, stricter immigration enforcement under the Trump administration is further dampening spending in immigrant communities across Southern California.
Some restaurants are now offering aggressive discounts to retain customers. Even those that never previously discounted are launching lunch specials or combo deals to draw traffic. “We’re losing money when we discount,” said A, a Korean restaurant owner. “But it’s better than having an empty dining room. Right now, people are very price-sensitive.”
While the restaurant industry may appear strong on the surface, the growth is primarily concentrated among franchises. For Korean American small business owners, the so-called boom masks a deep divide—one that’s hitting Koreatown especially hard.
BY WONHEE CHO [cho.wonhee@koreadaily.com]
