O’Charley’s Restaurant + Bar, a familiar name in the casual dining sector, is undergoing significant changes as it faces the closure of a substantial number of its outlets. In a recent and rather sudden development, the chain closed 18 of its locations, as reported by Restaurant Business Magazine.
These closures are part of a broader trend for the chain, which has seen a total of 51 of its restaurants shut down in 2023 alone. This represents over a third of its total units, signaling a critical restructuring phase within the company.
O’Charley’s, akin to other casual dining establishments like Applebee’s or TGI Fridays, offers a diverse menu that includes shareable appetizers, burgers, ribs, steaks, salads, southern-inspired dishes, and a selection of beers and cocktails. However, despite its appealing menu and the casual ambiance it offers, the chain has struggled with declining sales and changing dynamics in the locations surrounding its restaurants.
The backdrop to these closures is multifaceted. Over the past few decades, malls and other retail entities that once drew significant foot traffic to nearby O’Charley’s locations have been closing down or relocating. This shift, compounded by the rise of online shopping during the COVID-19 pandemic, has drastically reduced customer visits.
Financial pressures from increasing rent and commodity costs have further exacerbated the situation. According to Restaurant Business Magazine, O’Charley’s systemwide sales plummeted by 34% from 2017 to 2022, a steep decline that underscores the challenges faced by the chain. Although there was a brief uptick in sales in January 2023, the following months saw a continued decline.
The decision to close 18 locations in states including Ohio, Kentucky, and Indiana, among others, is part of a broader strategy aimed at revitalizing the chain’s financial health. With the current total of operating restaurants reduced to 91 across the Midwest and South, the company’s leadership is hopeful that this move will lead to a stronger, more sustainable network of outlets.
Craig Barber, the CEO of O’Charley’s, likened the process to the necessary pruning of vines in a winery, a practice that helps produce better, higher-quality grapes and promotes overall vineyard health. He expressed optimism that this difficult phase of closures would similarly result in a more robust and thriving chain.
Moreover, O’Charley’s is actively working to reinvigorate its appeal to customers through various promotions aimed at offering value. The reintroduction of the popular Free Pie Wednesday promotion, which offers a free slice of pie with the purchase of any adult entrée, and the new “Shrimp Lovers Weekend,” which provides special deals on shrimp dishes, are part of these efforts. These initiatives are designed to draw in cost-conscious diners and boost foot traffic, hoping to turn the tide on recent sales declines.
As O’Charley’s navigates through these closures and seeks to stabilize its business, the future of this long-standing chain remains focused on adapting to the evolving dining landscape and recapturing its place in the competitive casual dining market.
