OFF THE MENU: TGI Fridays abruptly closes a dozen locations in a month in latest dining massacre after shutting 36 stores this year
According to The Sun, TGI Fridays has revealed plans to close a dozen locations as part of the company’s ongoing growth strategy. This announcement follows the abrupt closure of seven restaurants in May and 36 more in January.
Recent Restaurant Closures
Earlier this month, TGI Fridays shut down multiple restaurants across 10 states. Notable closures in the Northeast included locations in Clifton Park, Middletown, and Poughkeepsie, New York; Allentown, Pennsylvania; Enfield, Connecticut; and Leesburg, Virginia. Additionally, the chain closed restaurants in the Southeast and Midwest, impacting states such as North Carolina, South Carolina, Wisconsin, Michigan, Indiana, and two locations in Minnesota.
Optimizing Operations
In a press release, TGI Fridays Chief Operating Officer Ray Risley explained the rationale behind the closures. “We’ve identified opportunities to optimize and streamline our operations to ensure we are best positioned to meet — and exceed — our brand promise,” he stated. By closing underperforming stores and strengthening their franchise model, TGI Fridays aims to create new opportunities for growth.
Business Transformation
Prior to the recent closures, TGI Fridays operated around 270 locations in the U.S. The company also announced that eight locations were sold to former CEO Ray Blanchette, a longtime stakeholder who will acquire these previously corporate-owned restaurants. Major leadership changes, including the appointment of Weldon Spangler as CEO, signal a transformative period for the brand. “As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays,” Spangler said.
The Retail Apocalypse
The closures at TGI Fridays are not isolated; they reflect broader trends in the retail and restaurant sectors. The “retail apocalypse” has led independent stores and major chains to adapt their business plans as consumer shopping behaviors have evolved. Experts attribute this phenomenon to the rise of online shopping, the decline of malls, and shifting economic conditions affecting the middle class.
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Impact of Inflation on Dining Out
The challenges facing the restaurant industry have been compounded by the COVID-19 pandemic, leading to significant closures in 2024. To better understand the factors driving these restaurant closures, The U.S. Sun interviewed Mitchell Olsen, a marketing professor specializing in retail at the University of Notre Dame. He noted that rising food prices have impacted diners, with costs increasing by 4% since May of last year.
Olsen explained that inflation has put pressure on fast-casual restaurants in two ways: higher operating costs due to wages and food prices, and the difficulty of passing these costs onto customers through increased menu prices. As a result, diners are becoming more cautious about their spending. “Consumers are starting to push back against the high cost of dining out by thinking twice about that appetizer or going to a restaurant in the first place,” he said.
The Path Forward
Food prices rose by 2.1% from May 2023 to May 2024, impacting consumers both in restaurants and grocery stores. Olsen noted that while inflation is slowing, it remains high compared to pre-pandemic levels. “Although inflation is decelerating, it remains stubbornly high compared to the pre-pandemic prices that remain a reference point for many consumers,” he concluded.
