04 August 2008

Tough Times for Chain Restaurants

From the July 30 Wall St. Journal:

[The bankruptcy filing by Bennigan's and Steak and Ale] is the most extreme sign yet of how midprice, sit-down restaurants are undergoing one of their worst periods in decades...

High ingredient and labor costs are eating into profits, and several years of rapid expansion by bar and grill chains has left a glut of locations in the market. Pressures such as high gasoline prices and dwindling home values have prompted consumers to eat out less often or switch to cheaper fast-food meals.

The venerable chains weren't able to survive in part because their menus and atmosphere failed to set them apart from the pack...

"There's just too many stores in this category... most of these places aren't even that full on a Saturday night." Chains have already started slowing their expansion and shutting locations, and [restaurant consultant] Mr. Paul expects that will accelerate.



This news struck me in light of the announcement of the upcoming Chipotle on Fountain Square. Perhaps this trend favors places like Chipotle, one of the better fast food establishments (or at least it used to be, I haven't been in a while).

Employees of chains might find out the hard way [the Chicago Bennigan's was given only a few hours notice] if places like Max & Erma's, Lone Star Steaks, Olive Garden, etc. start closing around here. Old Country Buffet already filed for bankruptcy this year but plans to restructure and re-open.

3 comments:

Kate The Great said...

I don't think Hate is a strong enough word to explain my disdain for chain. I reserve exceptions for burrito establishments and other fast food options a step up from the Golden Arches. But Golden Corral? Hell to the no.

5chw4r7z said...

I think Chipotle is in a different class, because its not really a sit down place, by design its probably the most portable fast food. While I won't go to a fast food place while at home, they do have their place. If I'm in a new city and have run around say museums all day, I'm dog tired. Theres no way I'm going to enjoy a quirky expensive meal. Give me a big&tasty and let me go to bed.
Every category has its place.

phyzish said...

i am all too happy to be working at an independent joint with a loyal base crowd of regulars who keep us more than afloat...