24/7 Wall Street: Consumers Abandon Some Chain Restaurants

Wednesday, 18 Dec 2013 11:36 AM

By John Morgan

  Comment  |
   Contact Us  |
|  A   A  
  Copy Shortlink
Some of what were once among America's largest chain restaurants are now shells of their former selves, losing as much as 50 percent of their sales and closing hundreds of their locations.

Perhaps proving that what is not new is old hat, at least in the world of food franchises, 24/7 Wall Street concluded some of the chains simply have not adapted to changing times and tastes.

Darren Tristano, executive vice president at Technomic, a restaurant industry research firm, said many of the struggling restaurants are victims of harsh competition. The majority of them are full-service restaurants.

Editor’s Note: Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

The declining restaurant brands suffer from an aging image and business model, Tristano told 24/7 Wall Street.

“Today, if you’re not updating your restaurant within, say five to eight years of the previous update, you’re falling out of favor.”

Topping the list in shrinkage from 24/7 Wall Street — or perhaps hitting bottom the hardest — is Bennigan’s, which had posted a 90.4 percent drop in sales to $62 million by 2012, in the process shutting down 250 restaurants.

24/7 Wall Street said the pub-themed chain suffered from an “increasingly outdated brand” and at one point after filing bankruptcy closed all of its restaurants, and has since opened some new ones on a selective basis.

“They have tried to rebuild the prototype that’s more contemporary and on-target with trends,” Tristano said. “But to date, it really hasn’t blown the doors out or grown. They just continue to see some of the weaker links in the chain fall off and close down.”

Steakhouse chains have been hit especially hard in the chain restaurant category.

Lone Star Steakhouse, Ponderosa/Bonanza and Black Angus Steakhouse have all seen sales drop by more than 50 percent in recent years, 24/7 Wall Street reported.

Lone Star has shuttered 140 restaurants, Ponderosa/Bonanza has closed 238, and Black Angus has shut down 63 locations.

The restaurant chain struggle have not been confined to a particular cuisine. Other prominent decliners include TCBY, Tony Roma’s, Fazoli’s and Don Pablo’s.

The Financial Times reported the broader U.S. retail category also faces difficulty at the chain level.

“It takes two sides to make a transaction and at the root of retailers’ problems is a supply glut they have created themselves. They have built far more shops than Americans need,” the Times reported.

The Times said data from the International Council of Shopping Centers showed that in terms of shopping mall space per capita, Germany has 2.7 sq. ft. per person, Japan has 3.9 and the United Kingdom has 5. But for every American shopper, there is 23.8 sq. ft. of mall space per person.

Editor’s Note: Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

Related Stories:

© 2014 Moneynews. All rights reserved.

  Comment  |
   Contact Us  |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Treasury Note Auction Wins Most Foreign Demand in a Decade

Tuesday, 25 Nov 2014 17:12 PM

Treasury five-year notes gained for a fourth day, the longest rally since August, as a $35 billion auction of the securi . . .

Stocks Fall as Slumping Oil Prices Push Energy Industry Lower

Tuesday, 25 Nov 2014 16:57 PM

A slump in energy prices pushed the stock market back from record levels on Tuesday. Energy stocks slid as the price of  . . .

HSBC, Goldman Rigged Metals’ Prices for Years, Suit Claims

Tuesday, 25 Nov 2014 16:51 PM

Goldman Sachs Group and HSBC Holdings were sued in New York over claims they conspired for eight years with two other co . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved