It’s been a decade-long slide for chain restaurants.
In the past 10 years, some of America’s biggest chains lost more than half of their sales as they closed hundreds of locations nationwide. Former American staples like Bennigan’s, Big Boy, and Ponderosa Steakhouse are teetering on the brink of extinction as they fight their way back from bankruptcy, and some, like Howard Johnson’s, Steak and Ale, and Chi-Chi’s lost that battle and disappeared from the landscape.
According to sales data provided By Technomic, these are the biggest losers; each restaurant started 2001 with more than $225 million in sales, and each experienced 50% or greater declines since then. Together they have shuttered a combined total of more than 4,000 outlets.
- Blimpie Subs & Salads
- Ponderosa/Bonanza Steakhouse
- Big Boy
- Don Pablo’s
- Tony Roma’s
- Damon’s Grill
- Country Kitchen
- Ground Round
The restaurant business is a kind of economic indicator for the middle class.
The average American adult eats out or orders takeout more than 200 times a year. The casual dining segment fares well in a strong economy—that’s the Applebees, Cheesecake Factories, and Ruby Tuesdays of the world with their full bars and laminated dessert menus. When times are tough customers used to trade down to fast food, but the 1990’s saw the rise of a new dining segment favored by a new generation of customers that pushed some of the old-line chains toward decline.
The fast casual segment was created by chains like Chipotle, Five Guys, and Panera.
It’s defined by limited menus of made-to-order items that are a step up from fast food, but without the hostess stations and wine lists of casual dining. Prices fall between those of the other two segments, and counter service cuts out the need for a 15% tip. Nobody seems to miss the Sutter Home wine by the glass.
Many of the casual dining chains saw their heyday come and go several decades ago.
Ethnic and local foods rule for young diners who seek variety and authenticity, while chain restaurants promote just the opposite: a sense of dislocation with a hodgepodge of nominal ethnic touches, and decor and dishes that promise you the same meal every time, wherever you are. Data from consumer market researchers at NPD Group show that 18-47 year-olds are abandoning the chains in droves. Older Americans have actually increased their spending on chain restaurant dining, but not enough to stop the slide.
The food is dull, the ingredients mediocre, but refills are free, the bathrooms are clean, and the meal unfolds predictably and reliably. Chain restaurants don’t strive to inspire; merely to not disappoint. But for a new generation of diners, that might not be enough.
Just for fun
Top Cultured created the flowchart Where Should I Eat? (Chain Restaurant Edition).