Brinker’s finishes dumping Macaroni Grill

And, dumping is right, as Brinker’s had to sell the Romano’s restaurant line for less than half its original asking price.

Oh, if you have gift cards, they remain valid.

Brinker’s drop reflects economic slowdown

Brinker’s, the parent of Chili’s and Romano’s Macaroni Grill restaurants, saw its fiscal first quarter profits drop 37 percent. And, its projections indicate it will be an ongoing indicator of an ongoing slowdown.

As I’ve blogged before, I wouldn’t be surprised to see Brinker’s fold some restaurants in its two flagship chains, entirely fold lower-performing nameplates besides the big two, or both.

I also wouldn’t be surprised to see some restaurant chain mergers in the next 12-18 months. Macaroni Grill is already up for sale, but no buyers yet.

Chili’s avoids a chill

Last week, upon the closure of Bennigan’s restaurants, I pondered what eateries might be next, and noted that Brinker’s was high on the list of many analysts.

Well, with a 49 percent drop in fourth-quarter profit, Brinker’s obviously hurting.

Well, non-Chili’s restaurants in the chain are, at least.

Macaroni Grill, different story. Brinker is selling its majority interest, and if Chili’s is doing OK, that means Macaroni and other Brinker restaurants ain’t. However, analysts don’t like that Brinker is keeping any share in Macaroni, which means it must really be stinking.

And, Bennigan’s appears to be a harbinger of recession-related restaurant weakness.

The Dallas Morning News story notes Bennigan’s bankruptcy filing was one of four major restaurant bankruptcies during the first seven months of 2008, compared with just two during all of 2007.

“In periods of stress in the industry before, we typically have not seen more than six bankruptcies in a year,” said Ron Paul, president of Technomic Inc., a Chicago-based market research firm. “And we already have four.”

“We’re well on our way to the most we’ve seen in a single year” since the 1980s, he said, when the economy was roiled by tumbling real estate values and the S&L crisis.

Back to Brinker’s.

Frankly, I’d worry about On the Border, too. It’s got plenty of competition in the Mexican restaurant world, from grab-and-gos like Chipotle below it to, here in Texas, a place like Matt’s Rancho Martinez, a cut above in quality.

What restaurant is next after Bennigan’s?

To tighten ship, or even close, that is.

Locally, here in Cedar Hill in particular and the Best Southwest part of suburban Dallas in general, we have several representatives of the top candidates among restaurant chains to close at least some individual restaurants, if not have company-wide troubles.

In general, think of the casual/semi-casual dining type and you’ve got the idea: from Red Robin at the low end through Cheesecake Factory and on to Brinker, the parent of Chili’s, Macaroni Grill, On the Border, Olive Garden and Red Lobster.

Why?

Anthony Mirhaydari says its because the current recession is shaping up to be more like the Carter-Reagan recession than the H.W. Bush or Clinton-Shrub recessions. I agree.

Both those recessions did not have oil or food prices as drivers. And, neither lasted as long as the Carter-Reagan one.

Beyond that, let me weigh in with some other observations.

Too much overlap.

How different, really, are Olive Garden (Darden’s) and Romano’s (Brinker’s)? No, I’m not encouraging restaurant company collusion, just making an observation.

For that matter, within Brinker’s, how much difference is there between Romano’s and Maggiano’s Little Italy?

As for Bennigan’s? The signs were there a month ago.