Los Angeles is witnessing a dynamic shift in its restaurant scene. While beloved eateries like Papa Cristo’s, Guerrilla Tacos, and TAIX have closed, a remarkable 758 new restaurants opened in the city last year.

Record Growth in a Changing Landscape

This figure surpasses the previous record of 729 openings set in 2024. The split between closures and openings highlights a broader transformation reshaping the restaurant industry nationwide.

The Impact of Digital Ordering

The explosion of digital-order services has fundamentally altered restaurant business models. Many new establishments operate with less space, reduced staff, and tighter margins, relying heavily on online orders through platforms like DoorDash, GrubHub, and Uber Eats.

“Limited-service” restaurants now comprise nearly a third of all new openings. However, traditional, full-service restaurants are also growing, with 539 openings in 2025 and a record 587 the year before. Including coffee shops, smoothie bars, and snack joints, the numbers are even higher.

Adapting to the New Model

Restaurateurs are adapting to this evolving landscape. Liz Gutierrez, for example, transitioned her pop-up restaurant into a small brick-and-mortar location in Beverly Grove with limited seating.

“This was something that could be operated with minimum labor, it could be way more manageable in terms of fixed costs and expenses, and we could still deliver restaurant-quality food,” Gutierrez said.

Economic Challenges and Resilience

Despite the growth, the total number of restaurants is nearly half what it was a decade ago. This is partially due to competition from online retailers like Amazon. However, restaurants offer a unique service that online retailers cannot replicate – fresh, prepared meals.

Linchi Kwok, a hospitality management researcher at California State Polytechnic University, Pomona, notes that labor costs and a lack of interest in hospitality work are driving owners to seek cost-effective solutions.

“Limited-service restaurants don’t have to hire many people to do the work. It saves labor costs, saves space, and saves the service turn-around time,” Kwok explained.

Financial Pressures and Regulatory Hurdles

Restaurants face financial pressures, including commission fees from delivery apps (typically 2-4% in L.A.). To offset these costs, they’ve reduced staff, eliminating positions like waiters, hostesses, and dishwashers.

Jot Condie, president and CEO of the California Restaurant Association, reported that taxable restaurant revenue in 2024 reached $11 billion, equivalent to 2012 levels when adjusted for inflation. He also cited increased regulations and a potential $30 minimum wage as challenges.

“The business environment is bad generally in L.A., but the city council and the mayor seem to be throwing salt in the wound,” Condie stated.

The Rise of Ghost Kitchens

Innovative models like ghost kitchens are also contributing to the growth. At Kitchen United, 56 restaurants operate out of a single facility in Beverly Hills and Beverlywood. Similarly, 40 restaurants are located near Dodger Stadium.

Elreda, owner of four Fatima’s Grill locations, recently opened a ghost kitchen location, citing savings and efficiency. “A lot of people are going the ghost-kitchen route because it’s quicker, it’s faster,” he said. “You avoid a lot of overhead and foot traffic.”

Data Methodology: This report examined more than 15 years of business license data reported to the Los Angeles Office of Finance.