I’m sad to say that many beloved chain restaurants are starting to seriously fall apart.
We’ll get into all the practical reasons why here in a minute, but I just want to say how disappointing it is to see so many big names from 20 years ago reduced to mere shells of themselves.
So much has changed in the world, it would be nice if this one thing could have stayed constant.
But it can’t, and here’s why:
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Millennials and Gen Z are just eating differently, and that has a huge negative impact for chain restaurants that have been doing things, you know, more or less the same way for years.
Many of these younger adults are eating a lot more global cuisine (think Thai, Ethiopian, Korean), so they’re heading to different restaurants from your typical American chains.
And many of them are primarily using meal delivery apps like DoorDash and UberEats, which of course means they have a TON more options to choose from.
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Everything we’re seeing from restaurants (especially the cheaper meal deals) indicates that they’re seeing customers get really cost-conscious.
Part of that is of course because of inflation, and some is also probably due to broader economic fears (the ongoing trade war hasn’t helped).
And of course, leaving that need for low prices to the side…
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The other end of the equation is that restaurants are getting pinched with food costs, too.
Tariffs raise prices all on their own.
And of course, when you add in the business uncertainty tied to tariffs, that’s a cost as well.
And workers want to get paid more, because inflation has taken a bite out of their paychecks too!
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With all of this swirling…it’s no wonder that a number of restaurants are throwing in the towel.
I’m highlighting here some of the major restaurants that have announced closures and layoffs. Of course, seemingly more are being added every day, so please comment if I’ve missed someone!
And also – it’s worth noting that every layoff decision is unique in some way, shape, or form. I’ve actually found one set of layoffs that should be temporary!
More on that later.
First, let’s go to one of the big losses…
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Red Robin has had a rough go of things since its mid-2000s heyday.
With falling sales and a product lineup that has often felt, honestly, pretty stale…
Management has put together an ambitious turnaround plan that involves all kinds of new marketing ideas and work for efficiency gains…
And, unfortunately, also store closures and layoffs.
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More specifically, Red Robin is planning to close 15 underperforming locations this year for a total of up to 70 in the next few years.
The loss of those 15 locations will, of course, pretty much have to come paired with layoffs for most or all of the staff.
I mean, we’re talking about a reduction of something like 15% of the company’s total stores.
That’s big.
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Hooters, long beloved for its wings (remember the endless wings deals?) has sunk so far that it recently declared bankruptcy.
Here’s what bankruptcy means in Hooters’ case…
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At first, there were no plans to close any restaurants, but Hooters did an about face and closed 30 restaurants.
It’s also selling all of its 100 company-owned restaurants to two of its franchisees.
Hooters has clearly lost relevance, but it remains around for now.
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America’s diner has been hit hard by shifting consumer preferences.
It seems like, when it comes to breakfast, people have either headed upstream to really nice, local, brunch places…
Or they’ve jettisoned sit-down restaurants entirely and angled for fast food, going to places like Chick-fil-A and Bojangles or to fast casual places like Chipotle or Cava.
It’s a sad state of affairs.
So sad, in fact…
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…that Denny’s has announced plans to close over 150 locations total by the end of this year (split roughly evenly between last year and this year).
That’s roughly a 10% reduction in store count.
It means a lot of communities will be without a longtime traditional favorite.
And while I think Denny’s may have kind of brought this on themselves…
That doesn’t make it any less sad. You know?
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If you’re not familiar with Eddie V’s, it’s part of the same class of restaurants as Ruth’s Chris, Morton’s, Capital Grille…
The kind of places you only go to for really, REALLY special occasions. College graduations. Rehearsal dinners. Promotions. (Or on the company dime if you’re lucky enough to need to schmooze a client.)
It’s definitely part of a bygone era when company expense budgets were more generous…
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Eddie V’s recently announced that it’s laying off all 61 employees at its Newport Beach, California location as it closes this month.
And sure – it’s just one restaurant, but consider this:
There are only 30-odd locations nationwide. So for one to close – especially after 20+ years – is a big deal.
And then there’s the curious case of McDonald’s…
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105 McDonald’s employees in Fresno, California won’t be able to work their normal shifts. Fortunately, that’s hopefully not quite as bad as it sounds.
You see, they impact the McDonald’s at 5645 E Kings Canyon Rd, which will be closed for a couple months while it undergoes renovations.
(More specifically, they’ll be building a new drive-thru bypass lane. Exciting stuff, eh?)
McDonald’s does hope to accomodate the workers at other locations while the store is closed between June and August.
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So there you have it – five restaurants popular with Boomers that are closing locations and laying people off.
(Although again, I think we can all agree that McDonald’s is kind of a special case there.)
But regardless of the reason for the layoffs, to the people laid off…the impact is the same.
Disrupted lives. The need to find new jobs. Extra worries and stress.
So my sincerest best wishes to everyone impacted, and their families.
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