Is your favorite local eatery in danger of closing down for good???
There is a school of thought that says the restaurant business is always a good business — people need to eat. A glance at the sales of many of America’s largest restaurant chains over the past decade quickly dispels this myth. Using data provided by food industry research firm Technomic, 24/7 Wall St. has looked at the ten restaurant chains with the greatest decline is sales from 2001 to 2010. In every case, sales have fallen 60 percent or more.
“Many prominent chain restaurant brands have lost ground with sales over the last decade. As many American consumers gravitate toward a more contemporary dining experience and more exciting menu options, traditional restaurant chains are losing relevance,” Darren Tristano, Executive Vice President of Technomic, told 24/7 Wall St. in an e-mail. “Today’s successful restaurant operator is challenged with keeping their menu fresh, their customers’ experience exciting and their concept contemporary.”
Many restaurants on this list are indeed casual, family dining establishments. The majority offer American Style cuisine — e.g., steak and burgers — in a bar or grill setting. These restaurants, such as Bennigan’s, Ground Round, and Damon’s, expanded quickly during the 1990s. Soon their presence was overshadowed by newer restaurants that consumers found more exciting, like Applebee’s, according to Tristano. Even now, new “fast-casual” restaurants such as Buffalo Wild Wings and Chipotle are outselling, and in many instances replacing, older restaurants.
The majority of the restaurant chains on our list have filed for bankruptcy over the past decade. Parent companies close large numbers of restaurants, as was seen with Ground Round Grill & Bar, Big Boy, and Bakers Square. These bankruptcies have left thousands of people without jobs. They also have, in some cases, lead to restaurant brands changing corporate hands.
Economic factors also contributed to this drop in restaurant attendance at these establishments. The recession has hit restaurants especially hard. Most of the bankruptcies declared by the companies on this list were filed in 2007 or later. When times are tough, small luxuries such as dining out may be cut. And restaurants whose customers no longer value them as relevant or exciting face the worst of this.
It’s hard out here for a pimp, maybe even harder for a chef…