Upscale steakhouse chain shutters dozens of locations

Core Insights - The restaurant industry, particularly steakhouses, has been significantly impacted by changes in work patterns due to the rise of remote and hybrid work, leading to decreased office attendance and reduced foot traffic in office-dense areas [2][3] - McCormick & Schmick's, a steak and seafood chain, has experienced a drastic decline in locations from 60 at its peak to just 13, primarily due to these changing consumer behaviors and economic pressures [4][8] Industry Trends - The Federal Reserve of Kansas City noted that reduced in-person work has led to increased office vacancy rates, negatively affecting businesses that cater to office workers [2] - The New York Fed reported that many service establishments in city centers remained closed even after lockdowns, indicating a slow recovery for businesses reliant on office traffic [3] Company Performance - McCormick & Schmick's reported a 10.2% decline in sales in 2024, totaling $82.1 million, while closing 8.7% of its locations, reflecting broader struggles within the industry [8] - Other chains, such as Outback Steakhouse, are also closing locations, with 41 underperforming sites shut down as part of a strategic review [11] Consumer Behavior - A significant portion of American consumers are cutting back on discretionary spending, with 54% expecting to spend less on dining out in 2025 compared to 2024 [15] - The "lipstick effect" suggests that while consumers may indulge in small luxuries, steakhouses are increasingly viewed as a luxury that many are willing to forgo [13][14] Economic Factors - Inflation and high interest rates are straining household budgets, leading to increased credit card debt and declining consumer sentiment [17] - The cumulative economic pressures are making it difficult for consumers to justify spending on high-priced dining options, such as steakhouses [14]