To hear some analysts tell it, yesterday’s left-field news of Bennigan’s restaurants’ chapter 7 bankruptcy is a harbinger of doom for the casual dining industry. From the Wall Street Journal’s Market Watch blog:
“These restaurants share many subtle and complex challenges that extend beyond this difficult economic climate,” says Ron Paul, president of Technomic. “To some extent, they’ve become victims of their own success–a mature category with too many units and not enough differentiation, at least in the eyes of consumers.”
According to Technomic, the top 20 casual dining chains in the category in which Bennigan’s operated had unit growth of 45 percent during the most recent five-year period, well beyond the growth in demand.
That rings familiar, no?
We listen to a lot of Marketplace on NPR and this story hits a few notes that have gotten a lot of play over the last year or so: You spend money faster than you can make it, make commitments that your wallet can’t keep, and eventually you go broke and lose your house. This seems to be a general trend in the U.S. right now, from gigantic corporations down to individuals.
But there’s another trend out there that might lend a hopeful counterpoint to the tired “sad music” they keep playing on that show, at least as far as eating is concerned: It could be, just maybe, that with the rise of the Food Network, the chef as rock-star, and the growing national obsession with eating fresh, local, creatively prepared foods and, the market for the kind of mass-produced family meals in which Bennigan’s specialized is shrinking.
This is obviously not a hopeful sign to investors and employees over at the ill-fated chain, but to the national health and well-being, it’s a good thing. To get really out there with it, there’s a chance that these lean economic times and simultaneous food chic could do wonders for the nation’s health: huge, meaty, deep-fried meals become too expensive and go out of fashion, while locally produced fruit, vegetables and proteins become the cheap and trendy option for more Americans. High oil prices may put more of us on bikes, riding to the farmers’ market or co-op instead of the ever-pricier and low-quality mega-chain. Healthy lifestyles by necessity!
There will certainly always be a place for casual family dining chains such as Bennigan’s, TGI-Friday’s, Applebee’s, etc. But based on yesterday’s news and the subsequent analysis, it seems those gambling on Americans’ obscene gluttony may have over-drawn.
Bennigan’s files for bankruptcy protection [AP]
Bennigan’s Bankruptcy Indicative of Larger Casual Dining Woes, Says Technomic [Market Watch]
Starbucks closing 600 stores in U.S. [AP/B-Net]
[Photo: A Bennigan’s in Seoul, Korea via Rhett Sutphin/flickr]