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Partying like it’s 1999 with an order of loaded potato skins may get more challenging, now that TGI Friday’s, which makes the (contested) claim that it invented the delicacy, has filed for Chapter 11 bankruptcy protection on November 2.
The week before the filing, it closed 50 of its company-owned locations in the US, leaving 39 company-owned and 124 franchised-owned locations in the US, according to CNN.
It was far from the first sign that the chain, which opened its first restaurant in Manhattan in 1965, is not exactly overwhelming today’s diner. In January, TGI Friday’s closed 36 company-owned restaurants that its US president and COO Ray Risley called “underperforming.”
TGI effed?: Compounded by the fact that it closed locations in January, the overall foot traffic at the chain’s US restaurants has been way down for the first 10 months of this year compared to last year. Traffic plummeted to its lowest the week beginning October 21, when visits were down 38.7% YoY, compared to the national average of full-service restaurants, where foot traffic was slightly up, at 1.4%, according to data from Placer.ai.
The week of May 5, foot traffic was highest overall for the chain, it was still down 20% YoY, while full-service restaurants overall were up 3%.
Perhaps a better benchmark than overall visits since TGI Friday’s closed so many restaurants this year is the average foot traffic per restaurant. But that, too, was far from encouraging. In the first 10 months of this year, average visits per location was down 10.3% compared to last year.
In other words, if TGI Friday’s rationale for closing 36 restaurants in January was that they were “underperforming,” it appears that they missed a few.
“TGI Friday’s—like most full-service restaurants—has faced an increasingly challenging environment in 2024,” R.J. Hottovy, head of analytical research at Placer.ai,stated in an email. “Visitation trends are down year over year—due to a combination of store closures and fewer visits per existing location—at the same time food, labor, and other restaurant operating costs remain high.”