Hooters entering bankruptcy highlights the dining chain's slow decline, but it's just one of many: Red Lobster, TGI Fridays and Buca di Beppo have also recently filed for protection from creditors. CNN Business reports on America's loss of appetite for casual dining chains.
Instead, diners are choosing to cook dinner at home and are finding cheaper options to grab a meal. That includes frequenting fast-food chains such as Chick-fil-A and Raising Cane's, and fast-casual restaurants like Chipotle and Cava.
In 2024, sales across the casual dining sector dropped 0.9%, while growing 0.6% at fast-casual chains and 1% at fast-food chains, according to data from Black Box Intelligence.
"In a time-starved world, people want something to be quick at an affordable price," said Brian Vaccaro, an analyst at Raymond James.
Note that the cited declines are under 1%. A deeper reason for some of these failures is that the chains were sold to private equity companies that stripped them of assets, loaded them with debt, then left them to function at the thinnest calculable margins. Death was always a variable away. CNN mentions this only obliquely.
But there are some bright spots in casual dining. Chili's, Texas Roadhouse and Olive Garden have bucked the slowdown.
These chains kept prices lower than rivals and invested heavily in labor and restaurant improvements, and they are currently reaping the payoffs from their investments.
Brinker, the parent company of Chili's, has poured more than $400 million into simplifying Chili's menu, adding more servers and bussers and renovating restaurants. That investment has allowed Chili's to upgrade its French fry and chicken tender recipes and offer fast food-like prices. It's subsequently gone viral on TikTok for videos of customers pulling apart its gooey mozzarella sticks.
All healthy restaurant/hospitality chains that haven't been under private equity-type ownership, at least as far as Wikipedia makes obvious.
As far as "it's the consumers' fault" goes… "Millennials are killing x" narratives are really about the decline of premium mediocre—a model of consumption that flourished with the Boomer-era economy. This peaked in the 1990s and 2000s, and persists largely because older folks still hold massive spending power. Even as the broader market contracts, their preferences remain deeply entrenched—sometimes aggressively so—propping up products and experiences that younger generations are increasingly unwilling to support. The result is a strange economic equation: fewer consumers overall, but with greater individual spending, creating a high-stakes competition for a shrinking pool of outsized wallets. That's what's going on in "casual dining" chains.
