Casual dining is in the throes of a midlife crisis.
A quarter-century ago, consumers feasted on fried appetizers, unlimited breadsticks and big desserts at Applebee's, Olive Garden and Chili's.
Today, many Americans are trading those restaurants in for cheaper, faster fare or splurging a bit for a trendier experience.
Midpriced, sit-down restaurants -- known as casual dining in the industry -- have seen on average about 2 percent fewer customer visits each year since 2008.
That translates into a total drop of almost 600 million annual visits, to 6.4 billion in 2012.
"They've been around quite a while and ... manyof them have not stayed asrelevant in meeting consumers' wants and needs oftoday," said Bonnie Riggs, a restaurant analyst with research company NPD Group.
The world's largest casual-dining company, Orlando-based Darden Restaurants, has been hit especially hard. Company executives cut sales and earnings expectations last month, acknowledging to analysts their major brands such as Olive Garden and Red Lobster have suffered because they've been too slow responding to major shifts in how Americans eat out.
"It is clear to us that given our current business situation, we are indeed in a new era," Chief Executive Officer Clarence Otis told analysts.
Other companies have experienced similar turbulence. Last week Applebee's and IHOP owner DineEquity reported declining traffic at both brands for its fourth quarter, while Chili's parent Brinker International toned down its profit forecast.
"We know casual dining is not the bright, shining star that it used to be," Brinker Chief Executive Officer Wyman Roberts told analysts.
The industry is trying to reinvent itself with lower-priced meals that are quicker and more healthful. Darden, for example, said last week it plans to speed up Olive Garden's lunch service, jump on culinary trends more quickly, attract younger diners with more technology and lure back lower-income customers with good deals.
The economy has played a major role in slowing sales. American budgets are taking one hit after another -- most recently from increased payroll taxes and rising gas prices.
Americans cut their dining-out budgets dramatically during the economic downturn, from which many in the middle class haven't fully recovered.
"Many consumers have had to adjust to having less ... and spending less," said a recent report from NPD Group, noting that nearly 75 percent now consider their spending cautious. So when they eat out, they are often finding cheaper alternatives.
Visits to so-called "fastcasual" restaurants, which include Chipotle and Tijuana Flats, rose by 8 percent last year compared with 2011, according to NPD Group.
Fast-casual restaurants sell fare that's a step up from fast food. But customers still order and pay at the counter, making meals quicker and cheaper than at sit-downs.
Applebee's is borrowing a page from the competition's playbook, testing a lunchtime express service in its hometown of Kansas City, Mo.
Customers can order and pay at kiosks, so they don't have to wait for servers to bring checks when they're done.
If that test is successful, analyst Mark Kalinowski of Janney Capital Markets expects Darden and other companies to mimic it.
Darden wouldn't say whether it is considering the idea, although company leaders say Olive Garden is trying to "streamline" takeout.





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