Food for Thought
These four restaurants may top the list of most-prolific potential bankruptcies, but they’re hardly the only restaurant chains hanging by a thread. There are more, less-known and less-obvious names that could have been added to the list.
All of these companies have something of a common thread though … they’re all aiming for the mid-tier spender that doesn’t exist the way it did in the 90s and early 2000s.
Gone are the days of an $8 sandwich for lunch when a similar meal can be had for about $5 at a Subway restaurant. Similarly, Red Lobster could have justified a typical $20 ticket (per visit, per person) a decade ago, but with consumers getting stingier — and healthier — fried seafood at a premium price isn’t exactly a draw.
And as for Ruby Tuesday, the same “shtick,” not to mention the same menu, from the 90’s just doesn’t get the job done anymore. Even a salad bar eventually becomes passé, as time and convenience factors that didn’t exist a few years back take a toll now.
The point is, restaurants that haven’t adapted or evolved over the past 10 years are all poised to hit a headwind. This group is just the beginning, unless restaurateurs take a step back and reinvent themselves from the ground up.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.