5 Steakhouse Chains Falling Out of Favor With Customers
The last two years have been hard on the restaurant industry as a whole, but certain chains have come out on top during the course of the post-pandemic recovery. Turns out that when people decide to go out to dinner for the first time in a while, they want to go somewhere fancy, like a steakhouse. And many steakhouse chains found themselves to be even more popular than they were back in 2019.
Sales at Texas Roadhouse and LongHorn Steakhouse were up 23% and 15% respectively on a two-year basis. And chains that were formerly downsizing, like Ruth's Chris and Outback, returned to growth in the last year. In fact, Outback Steakhouse has plans to open as many as 100 new locations in the coming years and Ruth's similarly plans to open five to seven restaurants each year as it continues to grow.
But not all steakhouses reaped the benefits of the dining-out renaissance, some continued to struggle, whether that was due to financial troubles, the resurgence of COVID-19 cases, or, in some cases, fraud and money laundering investigations. Here's a look at five steakhouses that are currently struggling to hold onto their customers.
BLT Restaurants Group, the New York-based parent company of BLT Steak and BLT Prime steakhouses, applied for and received a $3.3 million Paycheck Protection Program (PPP) loan in 2020 with the hopes that it would cover their business for the duration of the pandemic.
Unfortunately, BLT Restaurants Group lost $7.6 million in income that year and has still not been able to repay its loan. The federal government refused to forgive the company's loan, forcing the group to file for bankruptcy this year.
BLT Restaurants Group has already closed five of its restaurants, including BLT Prime and BLT Burger in Washington, D.C.; Casa Nonna and The Wayfarer in New York City; and BLT Steak in White Plains, N.Y. It remains unclear how the remaining locations will make out, four of which are located in Southeast Asia.
This California-based steakhouse chain was once known for a luxury dining experience at an affordable price. In the year it opened, you could snag a New York Strip with a potato side dish, plus a roll and butter for $1.39 (about $12 today). It also didn't require customers to tip, which made dining there even more cost-effective.
Unfortunately, casual dining chains like Outback and Red Lobster proved to be fierce competition in the '80s, and Sizzler has been struggling ever since. The company filed for bankruptcy in 1996 and again in 2020 after the pandemic pushed it over the edge with a whopping 63% decline in sales that year. Today, the chain operates some 100 stores, having shuttered 30 locations since 2018.
This Texas-based chain is yet another steakhouse that filed for bankruptcy more than once. The restaurant filed for bankruptcy in 2016 and continued to see declining sales in the following years. Its parent company CraftWorks Holdings (which also owns Gordon Biersch), filed for bankruptcy in 2020.
While this sounds like bad news, it might turn out to be good news for Logan's Roadhouse. Fortress Investment Group bought out CraftWorks restaurants and formed SPB Hospitality. SPB has poured money and resources into Logan's menu redesign, ghost concept kitchens for carry-out, a loyalty program and app, and a remodel of the flagship restaurant in Houston.
While it's unclear how these efforts have affected sales, SPB Hospitality CEO Jim Mazany says they've had "great success," so it looks like Logan's may be back on track soon. Perhaps its currently shrinking footprint, which has dropped by nearly half since 2015, will start growing again sometime soon.
Maple & Ash
Maple & Ash, a small upscale steakhouse chain founded in Chicago, has been doing just fine financially. The company is projected to achieve a gross revenue of $200 million this year, up from $100 million last year. But customers of this trendy establishment are starting to wonder, is the food and experience really worth such a pretty penny?
"It is incredibly overpriced for what it is . . . It used to be better but they raised prices by a lot," wrote one Redditor. Others also complained about the price tag as well as the fact that Maple & Ash restaurants are a loud and crowded "scene." In a review for Phoenix Mag, Nikki Buchanan writes that "the buck is prodigious, the bang scant" and said she spent $1,100 on "utter mediocrity."
But an overhyped reputation and high prices are only one of Maple & Ash's current issues. Its parent company, What If Syndicate, is dealing with infighting that is putting the company's business at risk.
A lawsuit was filed in early April by David Pisor, a partner of What If Syndicate, that alleges "ongoing, irreparable harm" done by his business partner, James Lasky. The lawsuit states that Lasky's actions have put "the company in a cash-constrained state that severely threatens its overall financial health" and jeopardized the seven upcoming restaurants that the group is working on opening.
Ponderosa and Bonanza
Ponderosa and Bonanza steakhouses have been around since the '60s. Unfortunately, much like the once-popular TV shows they were named after, Ponderosa and Bonanza seem to have been forgotten.
Those that haven't forgotten it say that the quality is simply "not as good" as it was in the past. The chain's sales have declined so badly in recent years that its footprint is at only 23 locations—down from 76 in 2017.
On top of that, the chain's current parent company FAT Brands Inc. is currently under investigation for alleged fraud and money laundering.
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