In an Uncertain Time, 3 Lessons Operators Can Learn From Casual Chain Leaders

Reading the headlines lately — or if you’ve been following along with our Weekly Wraps — you might think that restaurants as we know them will soon be a thing of the past. Tariffs are killing margins, consumer confidence is shaky, and traffic is down across the board. Chipotle just revised its sales forecast downward, citing inflation and economic uncertainty. French fries are under threat from a tariff-fueled canola oil crisis. And full-service chains like Hooters, Red Lobster and TGI Fridays are filing for bankruptcy amid declining foot traffic and rising costs. 

The majority of the casual sit down dining sector is in a free fall, save for Chili’s, whose value focused menu is driving a boom in sales. Several quick-service/fast-casual operators are struggling, though there are glimmers of hope in that sector; Wingstop announced massive growth and revenue and profit increases, Taco Bell also saw Q1 increases. But these are the outliers; the majority of the restaurant industry is stressed and uncertain. 

We’ve been here before. After 9/11, the Great Recession, and the Covid-19 pandemic, it felt like we wouldn’t make it. But we’re still here. Not without losses, of course — there are definitely scars. But in each instance grit, innovation, and ingenuity got us through.

Today’s challenges are legitimate. The National Restaurant Association estimates tariffs could cost the industry over $12 billion, forcing operators to raise prices or cut costs. That’s no joke, and we will likely see real attrition from what’s happening right now. 

But here’s the thing: with all the adversity and gloom, there is opportunity. Independent restaurants are adapting by exploring new revenue streams, like ticketed events, pop-ups, prepaid memberships, and exclusive tasting menus. Chains like Chili’s are streamlining menus, focusing on value, and enhancing customer experiences to stay competitive. Even amid a challenging year, fast-casual brands like Cava and Wingstop have seen growth in same-store sales and traffic. And even though they may have the capital and resources well beyond most mom-and-pop spots, there’s so much to learn and take away from how these brands are approaching this moment. Here are a few places to start.