A tough 12 months for the restaurant trade led many chains to shut underperforming places in 2024, as they attempt to enhance their gross sales within the years to return.
Inflation-weary customers pulled again their restaurant spending in 2024 and as a substitute sought value and discounts after they did select to dine exterior their houses. Overall U.S. restaurant visits fell for the primary 10 months of the 12 months, in accordance with information from trade tracker Black Box Intelligence.
The decline in restaurant spending led to weak gross sales and a surge in bankruptcies for the trade. Twenty-six restaurant firms filed for Chapter 11 bankruptcy safety in 2024, almost triple the variety of filings in 2020, through the top of the pandemic.
With few exceptions, casual-dining chains specifically struggled to draw prospects, including to the section’s challenges which have mounted because the Great Recession. Since 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 within the prior many years.
Here are the restaurant chains that introduced closures in 2024:
Wendy’s
The Wendy’s emblem is seen on an indication exterior the restaurant in Muncy.
Paul Weaver | Lightrocket | Getty Images
In late October, Wendy’s introduced it might shutter 140 underperforming places by the tip of the 12 months, along with the roughly 80 closures it had within the first three quarters.
Executives made the choice to prune some outdated eating places that had annual unit volumes of about $1 million every to enhance the corporate’s total footprint.
Despite the closures, the corporate expects to finish 2024 with an unchanged restaurant depend, due to its new restaurant openings, Wendy’s CEO Kirk Tanner informed buyers 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 Images
In May, Applebee’s father or mother, Dine Brands, stated it deliberate to shutter between 25 and 35 of the model’s U.S. places. By late September, Applebee’s international unit depend had fallen by 36 places in contrast with the year-ago interval.
Applebee’s same-store gross sales have declined for the final six straight quarters, in accordance with firm filings.
Dine Brands, 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 Images
Denny’s closed about 50 places in 2024 and plans to shutter an extra 100 eating places by the tip of 2025. Including this 12 months’s closures, the 24-hour diner chain nonetheless has roughly 1,300 open places.
The eating places marked for closure are within 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. Once 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 places yearly.
TGI Fridays
TGI Fridays emblem is seen on considered one of their branches.
John Lamparski | Lightrocket | Getty Images
In November, TGI Fridays joined the slew of restaurant firms that filed for chapter safety. But 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 places worldwide. But the depend might dwindle extra. A chapter court docket in Texas will decide TGI Fridays’ future, which might imply closures for the chain.
Red Lobster
The exterior of a Red Lobster restaurant on May 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 Images
Red Lobster completely shuttered greater than 120 eating places in 2024.
The seafood chain closed roughly 100 places earlier than it filed for Chapter 11 chapter safety in May. Before it exited chapter with a brand new proprietor and CEO, the corporate rejected the leases of one other 23 eating places.
But with 2024 now within the rearview mirror, Red Lobster is hoping {that a} comeback — with no extra restaurant closures — is in its future.
Noodles & Co.
Michael Siluk | UCG | Universal Images Group | Getty Images
Fast-casual chain Noodles & Co. introduced in August that it might shut roughly 20 places after reviewing its total 475-restaurant footprint.
The overview 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, reducing objects that do not promote and including new entrees that may attraction to extra prospects.
But the turnaround will take time. In its newest quarter, the corporate stated same-store gross sales fell 3.3%.
Bloomin’
Customers arrive at an Outback Steakhouse restaurant on November 02, 2021 in Skokie, Illinois.
Scott Olson | Getty Images
Bloomin’ Brands, the father or mother firm of Outback Steakhouse, Carrabba’s Italian Grill and Bonefish Grill, shuttered 41 underperforming eating places in 2024.
The closures affected older places with leases courting 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 places’ gross sales and visitors, in addition to the price of investments to enhance the places. Most of the closures had been Outback places.
Like many different casual-dining firms, Bloomin’ has struggled to develop gross sales in current quarters. Its U.S. same-store gross sales fell 1.5% within the third quarter.
