Here are the real reasons why Buffalo Wild Wings and Applebee’s are dying


casual dining

Late last week, Business Insider posted an article that read “Millennials are killing chains like Buffalo Wild Wings and Applebee’s.” Within the article, Buffalo Wild Wings CEO Sally Smith claimed the “millennial” generation is “more attracted than their elders to cooking at home, ordering delivery from restaurants, and eating quickly.”

If you’re between the ages of 18 and 35, you know this is 100% true. The rise of “healthier” options like Chipotle and Panera exist to let younger consumers get their food quickly and at a much lower price. Delivery and cooking at home are also more appealing options, since they don’t require eating in a place where wings are wild or it’s somehow always Friday.

But are “millennials” at fault for causing a decline in the Outbacks and Applebee’s of the world? Hardly. There are several good reasons why you haven’t stepped foot in a sit-down chain restaurant for years. And no, they’re not your fault in the slightest.

Grocery prices are down.

It might seem like everything is slowly getting more expensive, yet the price of groceries is actually decreasing. According to the Department of Agriculture, grocery costs declined in 2016 by 1.3%, causing grocery store purchases to increase. The cost of eggs is down 21.1%. Beef costs 6.3% less than it did a year ago, and pork decreased by 4.1%. Dairy products are also down 2.3%. The cost of other items like fresh fruits might be up, but people are taking more advantage of lower grocery prices to cook for themselves instead of eating wings in a loud chain restaurant.

Delivery is much easier.

Companies like GrubHub and Eat24 make delivery easier than it’s ever been. You no longer have to call a restaurant and hope they got your order correct. Simply press a few buttons on your smart phone and you’ll have food within an hour. This ease of use and lower average cost than your typical casual dining restaurant makes delivery a more appealing option for many. Plus, you don’t have to leave the house.

You can make restaurant-quality meals at home for a lot cheaper.

Subscription services like Blue Apron deliver perfectly portioned groceries to your home and give you recipes to make three different meals. Though the weekly cost of using Blue Apron is around $60, this results in constant restaurant-quality meals for a fraction of the price. Blue Apron and other like services have millions of subscribers, many who choose to make meals themselves instead of, say, going to their local Applebee’s.

People are eating a tad healthier and less meat.

Fast causal restaurants offer hearty, tasty meals, yet provide few healthy options. Look at Buffalo Wild Wings, for instance. They primarily sell greasy chicken wings with fattening sauces, along with other breaded and fried fare. They do offer “lighter” options like grilled chicken tenders, calorie-heavy salads, and a side of carrot sticks, but these options are limited. Health-conscious eaters are growing in numbers, and demand more variety. Such limited options aren’t going to cut it.

People are also eating less meat. If a vegetarian were to go to Buffalo Wild Wings or Applebee’s, they’d see relatively few choices catering to their tastes on the menu. These restaurants have yet to consider changing consumer tastes and keep offering the same “favorites” as before, hoping for a better end result.

Should you invest in casual dining stocks?

Buffalo Wild Wings ($BWLD) and Applebee’s (DineEquity, $DIN) aren’t doing so well on the stock market. Buffalo Wild Wings is down 6.74% since the start of the year and 1.43% lower than it was last year. DineEquity/Applebee’s, however, lost 41.42% of its value since the start of 2017, and 46.52% in a single year. This is well below the market average.

Bloomin’ Brands ($BLMN), owner of Outback Steakhouse and several other casual dining chains, is actually doing well in 2017. The company is up 13.42% since January, though they’re only up by 4% since the same time last year. So, not all stocks in the casual dining space are doing terribly, but they’re not breaking records.

If you think more people will eventually start going to the restaurants again, then by all means consider investing in them. Just be sure to do your research on each company first. If you feel the industry is headed for a continuous downward trend, you might want to avoid them entirely. Just know that it’s the companies’ faults for not keeping up with consumer trends, how people eat, and opening one too many locations. Your dining habits don’t have jack to do with their losses.


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