TGI Fridays has announced that it is closing down a dozen locations as part of the company’s ongoing growth strategy.
This comes after the chain abruptly closed seven locations in May this year, as well as 36 restaurants in January.
TGI Fridays shuttered a dozen locations this month following a year of financial woes[/caption]
The chain pulled the plug on the restaurants across 10 states earlier this month.
According to the company’s location section on its website, multiple TGI Fridays locations in the Northeast closed last week, including in Clifton Park, Middletown and Poughkeepsie, New York; Allentown, Pennsylvania; Enfield, Connecticut; and Leesburg, Virginia.
Additional closures from earlier this month took place in the Southeast and Midwest regions, in states like North Carolina, South Carolina, Wisconsin, Michigan and Indiana, as well as two locations in Minnesota.
“We’ve identified opportunities to optimize and streamline our operations to ensure we are best positioned to meet — and exceed — on that brand promise,” TGI Fridays Chief Operating Officer Ray Risley previously said in a press release.
“By strengthening our franchise model and closing under-performing stores,” he continued, “we are creating an unprecedented opportunity for Fridays to drive forward its vision for the future.”
WAVE OF CLOSURES
Before the closures, TGI Fridays had about 270 US locations, according to the company’s website.
Eight other locations were sold to former CEO Ray Blanchette, a longtime stakeholder who will acquire the previously corporate-owned restaurants.
The sale comes as major changes have been made to the brand’s leadership, including the news of Weldon Spangler being made CEO.
“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,” said Spangler in a statement.
‘RETAIL APOCALYPSE’
Independent stores and major retailers have been forced to adapt their business plans as customers’ shopping behaviors have changed over time.
A phenomenon, that has been dubbed the retail apocalypse, has gripped the sector for more than a decade.
Industry experts believe that it has been fueled by the rapid growth of online shopping, malls becoming more unpopular, and the death of middle-class consumers, as reported by Vox.
And, the issues facing the retail sector were compounded when the Covid-19 lockdowns hit.
The “retail apocalypse” has seen renowned chains go to the wall, while thousands of stores have closed nationwide.
Many restaurant chains have faced the chopping block as part of a wave of closures across 2024.
To shed light on the reasons behind these restaurant industry closures, The U.S. Sun interviewed Mitchell Olsen, a marketing professor specializing in retail at the University of Notre Dame in South Bend, Indiana.
Food prices are on the rise, with diners paying 4% more than they did in May last year.
Inflation of grocery prices
Although inflation remained unchanged from April to May this year, the cost of certain grocery products is rising.
Food prices rose 2.1% over the past year and certain categories are being affected more than others.
For example, cereal and bakery products cost 0.7% more than they did last year.
Meat, eggs, poultry, and fish cost 2.4% more than in May 2023.
Additionally, fruits, vegetables, and beverages are priced higher.
Olsen explained that hiked costs have heavily impacted fast-casual restaurants, with these inflationary pressures driving closures in two ways, from “both sides of the menu.”
“On one hand, it’s more expensive to operate restaurants due to higher wages and food costs. On the other hand, it’s becoming increasingly difficult to pass those higher operating expenses on to diners with ever-increasing menu prices,” he explained.
The high costs have diners reining in their spending habits.
“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,” said Olsen.
The cost of food rose 2.1% from May 2023 to May 2024, and consumers’ wallets are taking a hit not only while dining out, but also at the grocery store.
This change is especially noticeable after the pandemic, according to Olsen.
He concluded: “Although inflation is decelerating, it remains stubbornly high compared to the pre-pandemic prices that remain a reference point for many consumers.”
