Bahama Breeze, owned by Darden Restaurants, closed 15 locations, representing over one-third of its restaurants. This includes locations across various states such as Florida, New Jersey, and others.
The closures are attributed to declining sales (7.7% last year) and the tough overall climate in the casual dining sector. The company stated that closing underperforming locations is a strategic move to improve the overall brand's performance.
Darden Restaurants aims to rehire affected employees at nearby locations or provide severance packages.
The closures reflect broader challenges within the casual dining industry, linked to reduced consumer spending due to inflation and decreased consumer sentiment. Analysts suggest that closing underperforming units is a financially sound strategy, preventing resources from being wasted on struggling locations.
Darden, which also owns Olive Garden and LongHorn Steakhouse, experienced a difficult quarter, particularly in the same-store sales growth for these two brands. This further emphasizes the current market difficulties.
New York CNN  —Â
Bahama Breeze abruptly closed more than one-third of its restaurants this week, further compounding the casual dining segment’s problems.
Darden Restaurants, Bahama Breeze’s parent company, said in a statement that the closure of 15 locations was the “right decision because it will allow Bahama Breeze to focus on its highest performing restaurants and strengthen the brand’s overall performance.”
Restaurants that closed include five in Florida, four in New Jersey and one in Illinois, Massachusetts, Michigan, Nevada, New York and Tennessee. A spokesperson said that affected employees will try to be hired at nearby Darden-owned restaurants or be given severance.
The Caribbean-inspired chain has just 29 restaurants remaining. The closures comes after a tough year for Bahama Breeze, with sales falling 7.7% last year, according to data given to CNN from Technomic, a restaurant analysis firm.
Bahama Breeze’s struggles underscore the “tough times casual dining restaurants are facing,” said Maeve Webster, president of consulting firm Menu Matters. Those chains typically cater to lower and middle-income families looking for a sit-down meal, but diners are abandoning these companies as their disposable income shrinks because of inflation. American consumer sentiment plunged to a near-record low this month, the University of Michigan reported Friday.
Webster told CNN that “closing poorly performing units can be better for the chain overall than trying to fix them” because pouring resources into rescuing the poorly performing locations can “undermine the entire chain.”
“It’s similar to rationalizing a menu: Better to eliminate items that aren’t selling or rarely selling to improve the quality and consistency of what remains,” Webster remarked.
Darden, which also owns Olive Garden and LongHorn Steakhouse, had a tough quarter, particularly at those two brands, which are often standout chains for the company. Both concepts had weak same-store sales growth that came in below analysts’ expectations.
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