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9 Popular Restaurants Struggling In 2017 Due To The ‘Restaurant Recession’

Ruby Tuesday
Flickr | JeepersMedia

You already know that many brick-and-mortar retailers are struggling, but did you know that many sit-down restaurants are also facing tough times?

The restaurant industry has reported negative sales in 11 of the last 12 months, and traffic fell 3.4 percent in March, according to TDn2K, which tracks weekly sales from more than 26,000 restaurants and 145 brands.

Beyond that, 2016 was the worst year for restaurants since the recession—sales dropped 2.4 percent.

Some are calling this period a “restaurant recession.”

So, what’s the deal with restaurants? Fast-casual restaurants (think Panera) are become more popular and groceries are getting cheaper, which means more people are eating at home. Malls are struggling, which means less foot traffic at some restaurant locations. Young people especially like the convenience of fast-casual chains, such as Chipotle, which are easy to get in and out of quickly.

People are also looking for trendier places to spend their money, according to some experts.

“In terms of casual dining, a lot of it kind of comes down to the brands that are just kind of dated,” analyst Colin Radke told Business Insider.

Here are several restaurants that have seen declining sales recently—some are even closing locations.

1. Noodles & Company

It seems that pesto cavatappi isn’t doing so hot in some markets. Noodles & Company announced in February that it would close 55 underperforming locations at the beginning of 2017.

“The company’s financial performance has been adversely impacted by these restaurants, many of which were opened in the last two to three years in newer markets where brand awareness of the company’s restaurants is not as strong as in other markets,” according to a Noodles & Company announcement. “These restaurants have significantly underperformed the company’s restaurant averages.”

noodles and company photo

2. Chili’s

According to the most recent earning report, Chili’s revenues were down 2.9 percent compared to last year. Beyond that, stocks for Chili’s parent company reached their lowest price in nearly four years in late January.

In January, the company laid off 80 employees, its first large-scale layoff since 2009.

Good news, though. The company is planning to add craft beer to its menu and invest in new technology.

chilis photo

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3. Outback Steakhouse

Bloomin’ Brands, the parent company for Outback Steakhouse, announced earlier this year that it would close 43 restaurants, including dozens of Outback Steakhouse locations. Sales fell 4.8 percent at Outback Steakhouses, according to a February update.

outback steakhouse photo

4. Ruby Tuesday

Near the end of 2016, Ruby Tuesday announced that it would close 95 restaurants across the country, thanks to declining sales. That represents about 13 percent of all Ruby Tuesday locations.

Sales continued to sag in early 2017 and the company is trying to lure customers in the door with its revamped “Garden Bar,” a glorified salad bar.

ruby tuesday photo

5. Bonefish Grill

Bonefish Grill is another chain owned by Bloomin’ Brands and saw several locations close when the parent company decided to shutter 43 restaurants earlier this year. Bonefish Grill sales fell 1.9 percent at the end of 2016.

bonefish photo

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6. Applebee’s

Earlier this year, Applebee’s parent company announced that it would close between 40 and 60 restaurants this year. The company also predicted that sales would decline between 4 percent and 8 percent this year.

applebees photo

7. Joe’s Crab Shack

The parent company for Joe’s Crab Shack, which also owns Brick House Tavern + Tap, is looking for a buyer and may be forced to seek bankruptcy protection, according to an April announcement.

joes crab shack photo

8. Carrabba’s

Several Carrabba’s locations also closed in early 2017 thanks to a 2.3 percent drop in sales at the end of 2016.

carrabbas photo

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9. Famous Dave’s

Barbecue chain Famous Dave’s closed several restaurants last year and could be on track to close more in 2017. The company recorded a 13 percent drop in sales and hired its fourth CEO in four years in October.

About the Author

Sarah Kuta

Sarah Kuta is an award-winning writer and editor based in Colorado. She writes regularly about how to find deals, save money and find side gigs. Reach her at sarah@dontwasteyourmoney.com. More.

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