Why are These Italian Casual Dining Chains Underperforming Compared to the Rest of the Industry?

It's no secret that the traditional casual dining segment as a whole is struggling to compete as new innovative restaurant brands emerge, but there's one sector within this segment that continues to underperform. 

The Italian cuisine-focused brands like Bertucci's, Romano's Macaroni Grill, and Tony Roma's used to be fan-favorite restaurants where families and friends would gather together to enjoy signature Italian dishes.

Now these brands are seeing a slump not only in sales, but also in our Foodable Labs' RSMI scores.

Instagram: @californiapizzakitchen

Instagram: @californiapizzakitchen

In 2015, California Pizza Kitchen decided it was time to adapt.

The chain expanded its food and bar menu, which included incorporating seasonal ingredients and adding hand-crafted cocktails. The chain also started a complete store redesign with 20 pilot locations. Now customers can also watch their food as it’s prepared with the restaurant’s open kitchen concept.

But, the brand isn't going to stop adapting to today's new consumer. 

“CPK is resetting the stage for the next 30 years and we are calling this plan our ‘Next Chapter’,” said G.J. Hart, California Pizza Kitchen executive chairman and CEO in a press release. 

While we are seeing brands like California Pizza Kitchen and Anthony's Coal Fired Pizza that are adapting and continuing to perform at the top of this sector, the majority of Italian casual dining chains have some of the lowest social sentiment scores (which have been pulled from Foodable Labs data) in the industry. 

Meaning– consumers have a lot to say about these brands, but it's usually negative. 

But why is that? What has happened to these brands?

Let's take a closer look at why these brands may be underperforming. 

Carbs are the Enemy

With Atkins and other diets that have become popular within the last 10 years, processed carbohydrates like pasta and rice now have a negative connotation.

Making healthy eating decisions has become a consistent priority of today's eaters, especially millennials. 

Delicious Gnocchi

So visiting an Italian chain for a big bowl of pasta has become more of an activity for a "cheat day." 

While low-carb diets will likely lead to weight loss, the results are often temporary.

"Get less than 50 grams of carbs per day (the amount in two apples) for three to four days in a row, and your body will start tapping its own fat and muscle for fuel instead of its usual source: glucose derived from carbohydrates," writes "Consumer Reports." "That may sound like a way to shed pounds, but it can have serious health consequences."

“You’re altering your metabolism away from what’s normal and into a starved state,” said David Seres, M.D., director of medical nutrition at the Columbia University Medical Center in New York to "Consumer Reports." “People in starved states experience problems with brain function.”

Nonetheless, Italian chains still have to combat the consumer's assumption that pasta & pizza don't fit into a healthy lifestyle. 

Being Late to the Online Ordering and Delivery Game

In the casual dining sector in general, brands have been slower to offer delivery and online ordering. 

But now these brands are trying to catch up. CPK started to offer online ordering with the CPK Pizza Dough® Rewards Mobile App, which is available for both iOS and Android.

Instagram: @bertuccis

Instagram: @bertuccis

Red Robin and Denny's have both partnered with Olo earlier this year to offer online ordering. Denny's also offers delivery. 

Bertucci's is seeing an increase in take-out sales after offering delivery.

"Delivery has expanded our overall audience and revenue in carryout," said Karen Zaniker, Bertucci's interim chief marketing officer to "wine-searcher." 

But these brands were not on the forefront of the online ordering and delivery trend. Instead, they have started to offer these services in a response to pressure from consumers and tremendous competition. 

Upscale Casual is Taking Away Business

While restaurants in the casual dining segment were seeing less tables filled, another segment came out of nowhere and it's not fast causal.

Instagram: @burtonsgrillofcharlotte

Instagram: @burtonsgrillofcharlotte

We have noticed a sub-segment emerge in the industry, in between casual dining and fine dining. It's often referred to as polished or upscale casual dining. Chains like Burton's Grill, Matchbox American Kitchen + Spirits are elevating the culinary experience for guests, so much so that they are blurring the lines between casual dining and fine dining.

They offer a refined atmosphere, superior food offerings, and especially attentive service. When a diner enters these restaurants, they can easily see that they are in a category above a Chili’s or Applebee’s.  

The decline of Italian casual dining chains is a mixture of the factors above, along with lacking customization and losing control of franchisees which has led to the decline of quality in both food product and service. 

These reasons above evidently caused the owners of Romano’s Macaroni Grill to file bankruptcy in mid-October. The chain has been forced to close hundreds of stores and only has 116 still operating, which is half the number that were opened during the brand's peak. 

Chief Executive Nishant Machado at Romano's claims that the chain has struggled financially due to customers looking for cheaper and faster alternatives.

“The debtors’ operations and financial performance have been adversely affected by a number of economic factors, but perhaps must notably by an overall downturn for the casual dining industry,” said Machado in court papers.

Ultimately, some of these Italian brands need to either step it up with well-though out brand refresh campaigns or be left behind.

Check out the RSMI Overall and Sentiment scores of the Italian casual dining chains we are tracking through Foodable Labs below. 

RANK Restaurant RSMI Overall Sentiment
1 California Pizza Kitchen 434.5 80.92
2 Mackenzie River Pizza Co. 364.9 58.82
3 Anthony's Coal Fired Pizza 362 68.57
4 North Italia 352.3 53.36
5 BRAVO! Cucina Italiana 348.5 67.79
6 Brio Tuscan Grille 347.4 76.24
7 Maggiano's Little Italy 346.9 48.99
8 Rosati's Pizza 329.4 55.7
9 Uno Pizzeria & Grill 324.3 66.1
10 Buca di Beppo 322.9 58.59
11 CRAVE Restaurant 318.9 44.65
12 The Meatball Shop 317.5 63.24
13 Carrabba's Italian Grill 310 74.68
14 Romano's Macaroni Grill 305.2 58.04
15 Spaghetti Warehouse 293.5 51.58
16 Bertucci's 293.2 51.46
17 Tony Roma's 263.6 49.15
18 Naples Flatbread & Wine Bar 255.5 49.06