Many of the casual chain restaurants that Americans know and love may be in serious trouble because of a so-called “restaurant recession” going on right now.
TDn2K reported that 2016 was the industry’s worst year since the recession, but will 2017 be any better?
These 5 restaurant chains face a difficult 2017
Already this year, several major restaurant chains have shut down underperforming locations, often with little or no notice to the staff and clientele.
That’s one reason why Clark does not want you to buy restaurant gift cards right now.
So why aren’t people eating at casual restaurants anymore? Clark has said that many people, particularly millennials, are eating at home because grocery prices are down.
Our Facebook fans say there are several other factors:
- Prices are too high
- Food quality has declined
- Poor and slow service
- Prefer to support local restaurants
Clark.com used the latest sales data for the following major casual restaurants to identify those that are struggling to fill seats. Are any of your favorites on this list?
The parent company of Applebee’s reported that comparable same-restaurant sales fell 5% for fiscal 2016, and they’re expected to drop 4% to 8% for fiscal 2017.
Applebee’s said it plans to close 40 to 60 restaurants, which haven’t been named yet.
Brinker International announced in late April that Chili’s company-owned comparable restaurant sales decreased 2.3% in the third quarter of fiscal 2017.
Due to the poor performance, Chili’s has reorganized its restaurant operations team.
3. Ruby Tuesday
The bad news keeps coming for Ruby Tuesday, which closed nearly 100 restaurants in late 2016.
In early April of this year, the company announced a 16.8% decline in total revenue and a 4% drop in same-restaurant sales for fiscal third quarter 2017.
The chain says it’s in the process of reviewing “all strategic alternatives,” including a possible sale or merger.
4. Red Robin
Comparable restaurant revenue fell 4.3% in the fourth quarter of 2016 compared to the same period a year ago, Red Robin announced in late February.
It attributed the slide to fewer guest counts and a lower average guest check.
5. Buffalo Wild Wings
In February, Buffalo Wild Wings acknowledged that same–store sales decreased 4% at company–owned restaurants and 3.9% at franchised restaurants during the fourth quarter of 2016.
The chain’s president and CEO said Buffalo Wild Wings had a “difficult December.”
Who’s doing well? Olive Garden!
If you’re looking for a bright spot in the casual dining category, you can count on Olive Garden to be around for a while — people just can’t get enough of the salad, breadsticks and Italian favorites!
Same restaurant sales growth was 1.4% for the past quarter and customers haven’t lost their appetite for popular yearly promotions such as BOGO offers and Never Ending Classics menus.
The Cheesecake Factory, Texas Roadhouse and Cracker Barrel are a few other casual restaurant chains that seem to be doing something right — reporting sales increases as well.