TGI Fridays Cuts Deep: 12 More Locations Close in Latest Round of Closures
According to The Sun, TGI Fridays has revealed plans to close a dozen more locations as part of its ongoing growth strategy. This decision follows the abrupt closure of seven restaurants in May and 36 in January, highlighting a trend of restructuring within the chain.
Recent Location Closures
The latest round of closures impacted restaurants across 10 states, including several in the Northeast. Locations that shut their doors last week include establishments in Clifton Park, Middletown, and Poughkeepsie, New York; Allentown, Pennsylvania; Enfield, Connecticut; and Leesburg, Virginia. Additional closures in the Southeast and Midwest regions affected states such as North Carolina, South Carolina, Wisconsin, Michigan, and Indiana, as well as two locations in Minnesota.
Rationale Behind the Closures
Ray Risley, Chief Operating Officer of TGI Fridays, stated, “We’ve identified opportunities to optimize and streamline our operations to ensure we are best positioned to meet—and exceed—on that brand promise.” By focusing on strengthening their franchise model and closing underperforming stores, TGI Fridays aims to create new opportunities for growth.
The State of TGI Fridays
Prior to these closures, TGI Fridays operated approximately 270 locations in the U.S. In a strategic move, eight locations were sold to former CEO Ray Blanchette, who has been a longstanding stakeholder in the brand. This sale comes amid significant leadership changes, including Weldon Spangler’s recent appointment as CEO. Spangler expressed optimism for the brand’s future, stating, “As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays.”
The Retail Apocalypse
The closures at TGI Fridays reflect a broader trend impacting both independent and major retailers as they adapt to changing consumer behaviors. Dubbed the “retail apocalypse,” this phenomenon has gripped the sector for over a decade. Experts attribute this trend to the rapid growth of online shopping, decreasing mall popularity, and shifts in consumer spending, especially following the COVID-19 lockdowns.
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Challenges in the Restaurant Industry
To gain insight into the reasons behind the wave of closures in the restaurant industry, The U.S. Sun spoke with Mitchell Olsen, a marketing professor specializing in retail at the University of Notre Dame. He noted that rising food prices have forced diners to pay 4% more than they did in May of the previous year.
Olsen explained that the increased costs have significantly affected fast-casual restaurants, with inflationary pressures impacting operations from “both sides of the menu.” Higher wages and food costs make it challenging to maintain profitability, while increasing menu prices deter customers from dining out.
Shifts in Consumer Spending Habits
As a result of rising costs, consumers are becoming more selective about their dining choices. Olsen observed, “Consumers are starting to push back against the high cost of dining out by thinking twice about that appetizer or going to a restaurant in the first place.” He noted that the cost of food rose 2.1% from May 2023 to May 2024, placing a strain not only on dining out but also on grocery budgets.
Although inflation rates are showing signs of slowing down, they remain stubbornly high compared to pre-pandemic prices, significantly impacting consumer behavior and spending.
