Results: Food Trucks Do Not Harm Restaurants and May Help Them
Once hindered by Louisville, Kentucky’s protectionist rules, Troy King’s Pollo food truck has spawned two restaurants.
Overall, our results suggest food trucks pose little threat to the restaurant industry. Looking first at descriptive statistics and simple averages (see Table 1), the restaurant industry is vastly larger than the food truck industry. Across all the years in the study (2005 through 2016), the average number of restaurants per county, 145, swamped the number of food trucks, just one per county. Non-rural counties have substantially more restaurants on average, 334, but only two food trucks. 1
Table 1: Descriptive Statistics for the Counties, 2005–2016
|Number of Restaurants||145||487||334||761|
|Number of Food Trucks||1||4||2||6|
Additionally, both sectors saw growth during the time period we studied, although the growth was uneven (see Figure 1 2 ). The restaurant industry—again, much larger to begin with—grew from 133 per county in 2005 to 157 by 2016, though growth stagnated between 2007 and 2009, likely due to the Great Recession. 3 Food trucks saw a Recession-era dip from about 0.73 to just 0.63 per county in 2008, but after that they experienced a sharper uptick than restaurants, reaching 1.7 per county in 2016. This uptick corresponds with the increase in food truck popularity discussed above. It could also be related to a post-Recession phenomenon of people out of work from other businesses, including restaurants, turning to food trucks as new entrepreneurial opportunities thanks to their relatively low startup costs. 4 Demand for street food may have also increased as consumers sought out lower-cost options during the economic recession and recovery. 5 Regardless of the reasons, even as the food truck industry took off, the restaurant industry continued to grow. This suggests growth in the two sectors can go hand in hand.
Figure 1: Trends in Numbers of Food Trucks
and Restaurants, 2005–2016, All Counties
Stronger evidence comes from our regression analysis, which controlled for factors like economic conditions. This analysis was also designed to put restaurants’ hypothesis to the test by examining whether food truck growth causes later restaurant closures. Our results indicate the answer is no. We found no statistically significant relationship between the number of food trucks in one year and the number of restaurants in the next. In practical terms, more food trucks today do not lead to fewer restaurants tomorrow.
Interestingly, we did find a positive and statistically significant relationship between food trucks and restaurants in the same year (all: β = 3.45, p = 0.008; non-rural: β = 3.14, p = 0.020). As Figure 2 illustrates, a greater number of food trucks appears to correlate with a greater number of restaurants: For every additional food truck in a county, we would expect to see about three additional restaurants. Unlike the lagged analysis, this analysis is not causal—it does not mean that food truck growth causes restaurant growth—but it does suggest the two are positively related. This provides additional evidence food trucks do not hurt the restaurant industry—and they may even help. Below we discuss some possible reasons why food trucks may be complementary to the growth of the restaurant sector.