Why Sit-Down Chain Restaurants Are Struggling [Video]

Red Lobster filed for bankruptcy in May. TGI Fridays closed nearly 50 locations abruptly in October, then filed for bankruptcy in early November. Hooters shut down dozens of stores in June, while Buca di Beppo declared bankruptcy in August. Even budget standby Denny’s said in October that it would close about 150 stores in the next two years, citing “choppy economic conditions” and the fast pace of inflation for food away from home.

Sit-down chain restaurants may be the quintessential American business, beginning with the expansion of Howard Johnson’s after World War II as families got in the car and started to travel. But the economy is challenging the business model. Although inflation is slowing, cost-conscious consumers are eating more at home or at lower-cost fast-food restaurants, where the average check is $7.92, about half the average check at a sit-down restaurant, according to CREST, a database from consumer insight firm Circana. Many sit-down (or full service) …