dining’s value perception with consumers, an important factor at a time when many diners are looking to stretch their dollars as far as they can go. “Consumers are figuring out that casual dining is a great value, and so they’re coming to casual dining more,” said Olive Garden CEO Rick Cardenas during an earnings call in June. “Consumers want to go out and spend their hard-earned money, and we think we’re taking some wallet share from fast food and fast casual.” That could be true: Top 500 quick-service sales rose 2.4% in 2025, slower than casual dining, and while fast casual grew by 6%, it was a notable deceleration from previous years, per Technomic data. It’s another bit of evidence that casual dining is back, or at least on its way. But again, the comeback has not been evenly distributed. For the second straight year, casual dining witnessed a crop of bankruptcies, most notably the 200-unit Hooters last March. On the Border, Bar Louie, Bravo/Brio, Bertucci’s, Pinstripes and Razzoo’s also restructured. Most of them blamed some combination of lingering pandemic effects, inflation and slower consumer spending. Razzoo’s noted that it was losing customers to larger brands with more pricing power, like Chili’s and Applebee’s, underscoring the notion that consumers are being picky—and looking for value. Also for the second straight year, Top 500 casual-dining chains closed more restaurants than they opened. Unit count was down by 0.3%, or about 45 units, to 16,269. It’s not necessarily the sign of a thriving segment. But it may not be the worst thing in the long run, Pawlak said. “I still think our industry has too many seats chasing too few butts,” he said. “Population growth is basically flat, and we’ve overbuilt over a number of years. So I think there’s still some room to take locations out.” Overall, 2025 was not a bad year for casual dining. Some of the largest chains in the country had real success, and there are signs that it could be trickling down. Weaker locations are being weeded out, creating more opportunity for restaurants that remain. After a turbulent five years, the segment is finding its footing. And even better things could lie ahead. “The bleeding has stopped,” Pawlak added. “Now, it’s time to renourish and replenish that part of the industry, and I think the consumer’s ready for it.”
OVERALL, 2025 WAS NOT A BAD YEAR FOR CASUAL DINING. SOME OF THE LARGEST CHAINS IN THE COUNTRY HAD REAL SUCCESS, AND THERE ARE SIGNS THAT IT COULD BE TRICKLING DOWN.
had to rethink their whole operations to survive. Delivery, takeout and technology became priorities. Consumers stayed home. Only in the past year or two has the full- service ecosystem had a chance to return to its natural state. “Casual dining in general is starting to understand what consumers are looking for,” said Joe Pawlak, managing principal at Technomic. “At the end of the day, consumers still want experience. They still want to have quality food at a reasonable price. And so now chains have gone back to what they do best.” Indeed, brands in search of a Chili’s-like turnaround are investing in foundational elements like better ingredients, more hands- on service, and refreshed restaurants. BJ’s Restaurants, for instance, has made numerous changes to its menu over the past year, including revamping its pizza recipe and turning its signature Pizookie dessert into a social media star, with a new flavor arriving each season. It has also cleaned up its operations, removing unnecessary steps for servers and improving its training for hourly staff. Those changes have delivered seven straight quarters of same-store sales and traffic growth for BJ’s, as well as 3.1% total
sales growth last year. “It’s not like all ships are rising in casual dining,” said CEO Lyle Tick, “but I think those that are, are getting refocused on the things that matter.” Applebee’s has been on a similar journey of late. A focus on menu innovation produced a pair of best-selling cheeseburgers, and it has also hit on a value proposition that works: Two meals for $25. And more recently, in a bid to improve service, the chain has asked managers to spend more time in the dining room interacting with customers. “In this environment, I would argue, regardless of brand, [success] is about being a company that is focused on running good restaurants,” said John Peyton, CEO of Applebee’s parent Dine Brands, in an interview. Like much of the industry, casual-dining chains have also pushed out a wave of value meals and lower-priced items aimed at price- conscious consumers. Chili’s, Applebee’s, BJ’s, Red Robin and Outback Steakhouse all have their version of an Extra Value Meal. Even The Cheesecake Factory, strictly opposed to discounting, has added a selection of affordable “bites” that have proven popular. All of the above has boosted casual
JULY 2026 RESTAURANT BUSINESS
11
Powered by FlippingBook