Wendy’s, Denny’s and Red Lobster will close stores in 2024

A tough year for the restaurant industry has led many chains to close unprofitable locations in 2024 in hopes of boosting sales in the coming years.

Fed up with inflation, consumers cut back on restaurant spending in 2024 and instead sought value and discounts when eating out of the home. Restaurant visits across the U.S. fell in the first 10 months of this year, according to data from industry tracker Black Box Intelligence.

Declining restaurant spending led to weak sales and a spike in bankruptcies in the industry. In 2024, 26 restaurant companies filed for Chapter 11 bankruptcy protection, nearly triple the number of filings in 2020, at the height of the pandemic.

With a few exceptions, casual dining chains have particularly struggled to attract customers, and the industry’s challenges have only increased since the Great Recession. Since the rise of fast-casual chains, many diners have opted for the convenience and quality promise of players such as: chipotle pepper or sweet green Beyond the casual dining chains that dominated the past few decades.

The following restaurant chains have announced closures in 2024:

In late October, Wendy’s announced it would close 140 underperforming stores by the end of the year, in addition to closing about 80 stores in the first three quarters.

Management decided to liquidate several outdated restaurants, which had an annual unit sales price of approximately $1 million, in order to improve the company’s overall store footprint.

Wendy’s CEO Kirk Tanner told investors during the company’s third-quarter earnings conference call that despite closures, new restaurant openings will keep restaurant numbers unchanged through 2024. He said he expects to finish.

In May, Applebee’s parents dining brandsaid it plans to close 25 to 35 of the brand’s U.S. locations. By late September, Applebee’s global unit count was down 36 locations compared to the same period last year.

Applebee’s same-store sales have declined for the past six consecutive quarters, according to company filings.

Dine Brands, which also owns IHOP, has closed more stores than it opened every year since 2016, with the exception of 2022.

Denny’s plans to close about 50 stores in 2024 and another 100 by the end of 2025. Including closures this year, the 24-hour diner chain still has about 1,300 locations open.

Restaurants marked for closure are in the chain’s bottom-performing third, with annual unit sales of $1.9 million to $2 million, executives said at the company’s investor day in October. . Once these restaurants close, Denny’s expects both same-store sales and annual unit sales to improve. In the latest quarter, the chain’s same-store sales were nearly flat.

Starting in 2025, Denny’s plans to open 45 to 50 net new stores per year.

In November, TGI Friday’s joined a number of restaurant companies that filed for bankruptcy protection. But before filing for Chapter 11, the company closed 86 restaurants, starting with 36 in January and 50 more in late October.

The latest closures have reduced the chain’s footprint to about 160 locations worldwide. But that number is likely to decline further. A Texas bankruptcy court will decide the future of TGI Fridays, which could mean the chain’s closure.

Red Lobster will permanently close more than 120 restaurants in 2024.

The company closed about 100 stores before filing for Chapter 11 bankruptcy protection in May. The company refused to lease 23 more restaurants before emerging from bankruptcy with a new owner and CEO.

But now that 2024 is in the rearview mirror, Red Lobster is looking forward to a future of restaurant closures and resurgence.

fast casual chain Noodles & Company announced in August that it would close approximately 20 restaurants after reviewing its overall number of 475 restaurants.

The review was part of the company’s efforts to improve its operations and finances after a difficult few years. Noodles & Co. is also overhauling its menu, cutting out unselling items and adding new entrees that will appeal to more customers.

However, the turnaround will take time. The company announced same-store sales fell 3.3% in the latest quarter.

bloomin brandThe company, the parent company of Outback Steakhouse, Carraba’s Italian Grill and Bonefish Grill, closed 41 unprofitable restaurants in 2024.

Executives said on an earnings call in February that the closures affected older stores with leases dating back to the 1990s and early 2000s. To make the decision, the company weighed the store’s sales and traffic, as well as the investment costs to improve the store. Most of the closures were Outback stores.

Like many other casual dining companies, Bloomin’ has struggled with sales growth in recent quarters. U.S. same-store sales fell 1.5% in the third quarter.