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Inflation-weary customers pulled again their restaurant spending in 2024 and as a substitute sought value and discounts once they did select to dine exterior their houses. Total U.S. restaurant visits fell for the primary 10 months of the yr, in response to information from trade tracker Black Field Intelligence.
The decline in restaurant spending led to weak gross sales and a surge in bankruptcies for the trade. Twenty-six restaurant corporations filed for Chapter 11 bankruptcy safety in 2024, almost triple the variety of filings in 2020, throughout the top of the pandemic.
With few exceptions, casual-dining chains in explicit struggled to draw prospects, including to the phase’s challenges which have mounted because the Nice Recession. Because the rise of fast-casual chains, many diners have opted for the comfort and promised high quality of gamers like Chipotle or Sweetgreen over the casual-dining chains that dominated in the prior a long time.
Listed below are the restaurant chains that introduced closures in 2024:
Wendy’s
Paul Weaver | Lightrocket | Getty Pictures
Executives made the choice to prune some outdated eating places that had annual unit volumes of about $1 million every to enhance the corporate’s general footprint.
Regardless of the closures, the corporate expects to finish 2024 with an unchanged restaurant rely, because of its new restaurant openings, Wendy’s CEO Kirk Tanner advised traders on the corporate’s third-quarter earnings convention name.
Applebee’s
An indication is posted in entrance of an Applebee’s restaurant on June 12, 2024 in Hayward, California.
Justin Sullivan | Getty Pictures
In Might, Applebee’s dad or mum, Dine Brands, stated it deliberate to shutter between 25 and 35 of the model’s U.S. locations. By late September, Applebee’s world unit rely had fallen by 36 locations in contrast with the year-ago interval.
Applebee’s same-store gross sales have declined for the final six straight quarters, in response to firm filings.
Dine Manufacturers, which additionally owns IHOP, has closed extra shops than it has opened yearly since 2016, apart from 2022.
Denny’s
In an aerial view, prospects enter a Denny’s restaurant on February 13, 2023 in Emeryville, California.
Justin Sullivan | Getty Pictures
Denny’s closed about 50 locations in 2024 and plans to shutter a further 100 eating places by the tip of 2025. Together with this yr’s closures, the 24-hour diner chain nonetheless has roughly 1,300 open locations.
The eating places marked for closure are in the decrease third of the chain’s performers, with annual unit volumes of $1.9 million to $2 million, executives stated on the firm’s investor day in October. As soon as these eating places shutter, Denny’s expects that each its same-store gross sales and annual unit volumes will enhance. In its newest quarter, the chain’s same-store gross sales had been roughly flat.
After 2025, Denny’s plans to open between 45 and 50 internet new locations yearly.
TGI Fridays
TGI Fridays brand is seen on considered one of their branches.
John Lamparski | Lightrocket | Getty Pictures
In November, TGI Fridays joined the slew of restaurant corporations that filed for chapter safety. However earlier than it filed for Chapter 11, it shuttered 86 eating places, beginning with 36 closures in January and one other 50 in late October.
The final spherical of closures took the chain’s footprint right down to roughly 160 open locations worldwide. However the rely might dwindle extra. A chapter courtroom in Texas will decide TGI Fridays’ future, which might imply closures for the chain.
Red Lobster
The outside of a Red Lobster restaurant on Might 20, 2024 in Austin, Texas. Red Lobster has filed for Chapter 11 chapter safety after a failed lease-back settlement and “infinite shrimp” promotion backfired towards firm income.
Brandon Bell | Getty Pictures
Red Lobster completely shuttered greater than 120 eating places in 2024.
The seafood chain closed roughly 100 locations earlier than it filed for Chapter 11 chapter safety in Might. Earlier than it exited chapter with a brand new proprietor and CEO, the corporate rejected the leases of one other 23 eating places.
However with 2024 now in the rearview mirror, Red Lobster is hoping {that a} comeback — with no extra restaurant closures — is in its future.
Noodles & Co.
Michael Siluk | UCG | Common Pictures Group | Getty Pictures
Quick-casual chain Noodles & Co. introduced in August that it could close roughly 20 locations after reviewing its total 475-restaurant footprint.
The evaluate was a part of the corporate’s efforts to enhance its operations and funds after a rocky few years. Noodles & Co. has additionally been overhauling its menu, chopping objects that do not promote and including new entrees that may enchantment to extra prospects.
However the turnaround will take time. In its newest quarter, the corporate stated same-store gross sales fell 3.3%.
Bloomin’
Prospects arrive at an Outback Steakhouse restaurant on November 02, 2021 in Skokie, Illinois.
Scott Olson | Getty Pictures
Bloomin’ Brands, the dad or mum firm of Outback Steakhouse, Carrabba’s Italian Grill and Bonefish Grill, shuttered 41 underperforming eating places in 2024.
The closures affected older locations with leases relationship again to the Nineteen Nineties and early 2000s, executives stated on the corporate’s earnings convention name in February. To make the choice, the corporate weighed the locations’ gross sales and visitors, in addition to the price of investments to enhance the locations. Many of the closures had been Outback locations.
Like many different casual-dining corporations, Bloomin’ has struggled to develop gross sales in latest quarters. Its U.S. same-store gross sales fell 1.5% in the third quarter.
