This is from the weekly restaurant finance newsletter The Bottom Line. To get this in your inbox every Monday morning, click here.
The bowling-and-bocce-focused restaurant chain Pinstripes filed for bankruptcy last week, which was expected for some time. Its filing was the result of an ugly combination of high costs and dwindling profits, followed by steeply declining sales.
Pinstripes wasn’t ready for that, because it operated with an enormous amount of leverage. But it also makes me wonder how long other restaurant operators can last in the current environment.
The restaurant industry itself dealt with large-scale increases in food and labor costs, and then its sales started falling as consumers reacted to what the operators did to make up for those higher costs. This led to a lot of bankruptcy filings among restaurant franchisees, casual-dining brands and fast-casual chains.
Those filings have slowed this year, though there have been some big ones, notably Hooters. The filing by Pinstripes demonstrates that some operators are still teetering on the edge.
If this environment continues at its current pace, we wonder whether other chains could take that same step. Pinstripes is hardly the only brand out there that had a lot of debt and now faces weakening profitability.
This week’s financial news
Subway is going after the fit crowd for the first time in six years. The company has not been able to recapture its “sandwiches-are-healthy” marketing gold since you-know-who was jailed.
I did not have “Potbelly to be sold to a gas-station chain” on my 2025 BINGO card. Also given the number of times I’ve said that phrase this year I will not win 2025 BINGO.
The value wars are being fought on delivery apps because of course they are. We once again did our annual look at delivery services. Here’s the data. Here’s our report comparing third-party services with first-party services. And some recommendations for winning that channel.
Your average chain restaurant location gets 7% fewer customers per year than in 2019. But consumers are spending more. This is why consumers are pushing back.
I’m sure customers are going to rush to buy Cracker Barrel shirts with the old logo while enjoying the chain’s dated restaurants now that the company has scrapped its rebranding.
Number of the week
Sales per chain restaurant are up 24% since 2019, according to data from Technomic. But you know what’s up more than that over that period? Prices. Menu prices are up 31% since 2019.
Quote of the week
“We’re going back to some of what’s made us great over the years.” -Travis Lowe, VP of consumer product insights with Subway, on the chain’s reconfigured Fresh Fit Menu.
On the blog
I wrote about Portillo’s, restaurant traffic and delivery. Check out all my blog posts on The Bottom Line.
On the podcast
On A Deeper Dive I spoke with the chief merchandising officer with Casey’s. And on The Week in Restaurants, Joe Guszkowski and Lisa Jennings talk Potbelly, delivery and Portillo’s.
For questions, comments or story ideas, send me an email at jonathan.maze@informa.com. And follow me on Twitter at @jonathanmaze. And also LinkedIn. And TikTok.