Sbarro's, Krispy Kreme Among The Most Vulnerable Restaurant Chains

It's been nearly a year since Bennigan's filed for bankruptcy, and now US News & World Report examines some other food chains that may be vulnerable to the deteriorating economy. Searching data from Standard & Poor's, the magazine isolated those companies that met two criteria: a credit rating of B or lower and a negative outlook.

Among those it highlighted was Perkins, which has about 500 locations. While it has cut food costs, its revenue has still fallen $9.7 million in the first quarter of this year. With market share of only 8%, the restaurant chain told US News & World Report that it has cut expenses by $7.3 million, delayed some remodeling and called a halt to expansion.

Another company that could be at risk is Sbarro's. The pizza chain's 1,070 locations are mostly located in hard-hit malls, which helped contribute to the company's $5.7 million loss in the first quarter. It has also seen much of its cash flow go to paying off interest on its debt. Christmas season--which makes up about 40% of its sales--will be an important factor in how it does this year.

Captain D's is another chain, mostly located down South. With nearly 600 restaurants and a tag line that reads--"sit down food at fast-food prices"--would fit in this era of belt-tightening. Still, US News & World Report says it is carrying too much debt.

Krispy Kreme is busy closing unprofitable locations in a bid to reverse years of losses. And even though its revenue has plummeted since 2005, it did manage to post a $1.9 million profit in the latest quarter. A spokesman told US News & World Report, "We sell an affordable indulgence consumers will purchase when they can't afford to treat themselves or their families to other luxuries."

Mastro's are mostly found in Arizona and southern California, two areas of the country that have been most severely impacted by the housing bust. The steakhouse lacks geographic diversity, and sales have fallen as customers pinch their pennies. It has scaled back expansion plans in the wake of the downturn, with plans to open just four new restaurants by 2012.

Quick Poll

Which restaurant's survival is most at risk in this economic climate?

Perkins

Sbarro's

Captain D's

Krispy Kreme

Mastro's Steakhouse

Share your vote on Facebook so your friends can take this poll

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It’s been nearly a year since Bennigan’s filed for bankruptcy, and now US News & World Report examines some other food chains that may be vulnerable to the deteriorating economy. Searching data from Standard & Poor’s, the magazine isolated those companies that met two criteria: a credit rating of B or lower and a negative outlook.

Comments

[opine2u]

We know 'Five Guys' will still be doing business.

[booboo111]

Here's a diet plan that works for me. Breakfast) a large chocolate eclair and a triple expresso with six sugars. Lunch) a corn dog on a stick at the local 7 / 11, dipped in chile, and a big gulp, which is essentially a bucket of Coke. Dinner) two slices of pizza, as the tomato sauce provides your daily vegetable requirement. Try it You'll like it!

[booboo111]

I'm still missin' BOB'S BIG BOY!

[NoSillyName]

Yes, indeed. Reagan's hair always made me think of the Big Boy.

Is it out of business or haven't I seen it because I moved out of its area years ago?

[orangemom]

My small town on California's Central Coast is getting a Bob's Big Boy, set to open in a few weeks. I'm excited!

[JScott]

I think there are a few of em left, but a lotta them have closed or changed to other restaurants. The classic one in Burbank/Toluca Lake is still there. The original founding restaurant in Glendale has been other uses and currently is a World Gym I think.

[live]

their mushroom swiss burger on rye is my favorite hamburger in the world. Say it isnt so fat boy!!! dont leave us.
there isnt one in NM where i live and I would only get one when i visited my sister in MI. she moved to NC so now i get the beach but i still miss those burgers.

[lvogt]

I'm sorry but a donut shop is NOT a restaurant.

[booboo111]

Dunkin Donuts is offering two dozen donuts for 9.95. That's enough for eight meals!

[Goliadkin]

Hualph...!

[NoSillyName]

All the marketing about DD's coffee... anybody know if its really any good?

I only drink the more expensive stuff that I grind at home, so I'm picky about coffee. Bad coffee is worse than no coffee.

[Goliadkin]

Krispy Kreme says, "We sell an affordable indulgence consumers will purchase when they can't afford to treat themselves or their families to other luxuries."

Translated: When ignorant people are broke and hungry they can be easily lured into gorging themselves on low quality, refined carbohydrates that may give them momentary satisfaction, but in the end will make them morbidly obese and diabetic. This formula has brought us huge profits for years, but now people seem to be getting wise to the scam, and they're eating apples and carrots instead. Where did we go wrong?

[TchoupitoulasCanal]

THANK YOU!!

As a nurse I see this all the time. The best thing anyone can do for their health is to eat better, it's always been the case and it always will be.

I think the reason the tide is starting to change is because we're talking about it more. I used to love Krispy Kreme until I looked at the nutrition information and realized that 2 donuts were more than half of my daily caloric needs. My guess is that more people are noting the same and are doing a better job of calorie tracking and eating better.

[Goliadkin]

Thank you for being a nurse, one of the most honorable professions ever!

[TRichards]

Judging from Krispy Kreme's performance locally, it is abysmally run. The store opened to traffic jams that lasted for weeks -- looking to all the world like a gold mine. Then, the stupid little jerks were trying secretly to use the store as a distribution center, a surprise to the local politicians who shut down the early morning deliveries from the store to various food chains as something never authorized­.. They had opened as a storefront, not as a would-be distribution center.

The stupid part of it is that the Newington politicians would gladly have lain down and rolled over for ANY new business. Had Krispy Kreme simply petitioned to double as a distributorship store when they first applied, they would have likely had smooth sailing. Instead, they decided to pull a fast one, offending the egos of the local pols who then took a rare stand against a business for the locals in the neighborhood of the store.. Shortly thereafter, Krispy Kreme in Newington, Connecticut closed shop -- a fiasco that was as unnecessary as it was ludicrous.

But, the hot glazed doughnut made a helluva good impression on me, a guy who isn't normally a fan of glazed doughnuts -- until I asked for one without the glaze to see how the underlying doughnut itself tasted without all the sugar. Not good.

In any event, it isn't missed. It lacked a good coffee, making the omnipresent Duncan Doughnuts a more attractive choice anyway for my three doughnuts a

[zakwouldhave]

If Perkins closes many drunk/high college kids in St Cloud, MN will need another late night place to invade after the bar closes!

[booboo111]

Anyone remember the "Little Taverns" in the mid-atlantic?

[NoSillyName]

Yes, in Baltimore.

[TchoupitoulasCanal]

Taco Bell....wh­ich loosely translated means "small wallet, big hangover"

[RButler]

"Taco Ball"???? Nothing looks or tastes real there. The cheese looks like yellow candle wax. The meat is probably ground up old dairy cows that died while on duty. Ugh!

[JScott]

Sadly in some parts of the country that the 'best' you can get for 'mexican' food.

[poochytown]

More jobs gone. What a drag.

[yannb]

Whose fault? Read the comments. You'll find out people keep on demanding cheaper food, regardless of the quality. This is what jeopardizes our entire economy.

[Goliadkin]

Good point.

[AirViceMarshalPark]

No problemo, Ray's Hell Burger had a 400% jump in business after Obama ate there; they have had to hire 25 new employees to handle the crowds. That's a whole lot of people for a fast food joint.

Apparently, Obama IS saving the economy and jobs. He's doing it one burger fix at a time.

[yakaria]

They closed all the Krispy Kremes in MN. And I think they just stopped selling them in Gas Stations, not really sure though.

[yannb]

I never ate at any of these places. And aside from Krispy Kreme, I had never heard of any of them on the list. They may go.

[MsCuda]

We support locally owned and operated restaurants. We do occasionally do the chain, usually Subways.

As for the places mentioned, I've eaten in one once. Eating the food at most of those chains is like sucking on a salt shaker. Even Subways is salty if you eat the meat and/or use many of the sauces, but at least it's more under the customers control.

[RJII]

subway prices are OK too.

[Goliadkin]

Subway: I ordered a sub there once during a road trip, when no other food was on the horizon. Ended up throwing it away after one bite, then fasting and hyperhydrating for the rest of the day. That felt good.

The fresh-baked subs are a clever gimmick, creating the illusion of freshness, but there's very little nutritional value inside, and quality is poor. Servers are young, underpaid, discourteous and couldn't care less. You're just filling your stomach with empty calories and krunchy krap.

Hooray for real food.

"We've got to get ourselves back to the Garden..."

[NoSillyName]

Their "subs" are mostly bread. They cut out that small section and put the pre-determined small amount of food inside.

Rip off.

[JScott]

And check the sodium on many of it's ingredients, you can bet it's WWWAAAAYYYY
too much!

[AngusC]

Just so you know most chains are owned by local franchisees, including the Subway you go to.

[TRichards]

True, but the hands of the local franchisees are bound by the franchise itself. So it is that Starbucks stores all around are serving that dreadful Pike's Peak swill that obviously comes with superior profit margins. But, I'm glad for that. It ticked me off enough to start looking around for other good coffees and I've found several that have, as a bonus, lower prices! So it is that Starbucks lost one of its one-time loyal customers.

[unfazed99]

Sbarro's is so freaking expensive. What is it now like 3.50 for a regular slice? 3.75? Serves them right. Their pizza is actually good for mall food. But they have been ripping off customers with their insane pizza slice price for years, before they were even mall staples. I mean 2 slices and a coke can cost you nearly 10 bucks at this place. I won't be crying when they are gone. Sorry.

[JohnnyKong]

Totally. I stopped eating there a long time ago. Especially with so many other options at mall food courts at more reasonable prices, it makes sense they're failing. They won't be missed.

[Goliadkin]

To lead a rich and noble life in these turbulent times, eat fresh, plant-based food at home. Malls are not a place to nurture your health and well being.

Fast Food = Slow Death. (8]X

[booboo111]

Correcto! Sbarro's prices are outrageous!

[JScott]

Kinda sad when real Italian food is so good but all Sbarro's offers is basically
Pizza dough slathered in tomato sauce & cheese and pepperoni, or pasta slathered in same and maybe an unremarkable salad. Italian food is so much more than that.

[ladyvader]

I think all mall food is over priced.

[CHIPKEEPER]

stopped for gas, saw a krispy kream display, 1 doughnut 89 cents. passed on it. 8.99 for 12 and this was 11pm and they were about 18 hours in the display. and the 5 racks in the display was 1/3 full so a lot of us feel the same way. i have plenty of money and love doughnuts but not at these prices

[GreyWolfSC]

I just scrolled down here to say exactly what you did. Krispy Kreme should not be selling 25 cent donuts for nearly a dollar.

[yannb]

How can you expect America to get better? This "pay less for more" attitude is what got us where we are now. If you keep demanding cheaper food, it soon will be shipped directly from China. And more will go jobless. They'll have less money to spend and demand yet cheaper goods, which in turn will consolidate China's predominance on the market.
Break the downward spiral: don't be so cheap.

[Goliadkin]

They should not be selling donuts at any price. They should be selling real food.

[benji85]

I live in Orlando, and along University Blvd which has two of the three major universities in town there are two Perkins and I always asked myself why, it just seems so out of place to be so close to a younger generation when they are more family oriented. There were also a Bennigans and Krispy Kream but they are gone now. There have been a few more restaurants that have closed down, I am just glad that the good cheap ones are still around.

[acidfree]

The Perkins is probably there, and surviving, because of the college and that they are open 24 hours. The drunk frat boys and sorority girls need something to eat after last call at the bars.

[Tamoomoo]

Put a Krispy Kreme in my neighborhood and close all the other stores. It will flourish. Guaranteed. Just on me and my pregnant wife.