If you like to give gift cards around the holidays, Clark says you may want to avoid buying restaurant gift cards this year because so many restaurants are shutting down.
Why are so many restaurants closing?
It’s been a turbulent year for restaurants in general. Ruby Tuesday, Old Country Buffet and Bob Evans are just a few of the chains that have closed some restaurants. And a slowdown in the casual dining industry is to blame.
According to the NPD Group, there are 624,000 restaurants in America, down from a peak of 638,000 a couple of years ago.
“The decline in U.S. restaurant units overall is a reflection of the industry’s stalled traffic growth,” says Greg Starzynski with NPD Foodservice. “Our forecast finds that U.S. foodservice visit growth will be less than one percent in the coming years, which means there will not be significant unit expansion for a while.”
Industry experts believe the oversupply of restaurants will only lead to more bankruptcies and closings, according to a Wall Street Journal report.
As the newspaper points out, millennials in particular aren’t eating out as often. Instead, they’re saving money by shopping at the grocery store. As we’ve reported, food prices have fallen significantly throughout the year.
NPD’s data suggests that chains are doing better than independent restaurants, which are giving up amid the challenging environment.
Acknowledging the industry’s weakness, the CEO of Darden Restaurants, which owns Olive Garden, recently told investors, “We’re not assuming that the industry’s going to get a whole lot better.”
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