New York
CNN
—
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.
