Inflation and slower consumer spending have led some dining chains to close locations and file for bankruptcy this year, but executives at the parent companies of Taco Bell, Outback Steakhouse and Applebee's say they are sticking to plans to add restaurants.

Yum Brands, among the world’s largest restaurant operators with more than 59,000 Taco Bell, KFC and Pizza Hut outposts, reported opening 894 new locations with its global franchisees during the second quarter. That marked the second-highest tally for the April-June quarter in company history — and it expanded Yum’s total unit count by 5% from a year earlier.

“The development picture is really one that is strongly encouraging,” Yum Brands CEO David Gibbs told analysts on a call to discuss its earnings. Gibbs acknowledged that the increased demand in Yum’s restaurants includes lower-priced items as the Federal Reserve keeps interest rates elevated to try to quell inflation, creating an environment “where the consumer is probably pulling back a little bit.” 

The Louisville, Kentucky-based company's expansion follows location closings or Chapter 11 bankruptcy filings by several restaurant operators in just the past two months. Those have included Red Lobster, Rubio’s Coastal Grill, Buca di Beppo and some regional franchisees of Arby’s, Subway and Yum’s own Pizza Hut. Yum executives also pointed to challenges from political unrest in some regions, particularly in the Middle East.

Citing government data, the National Restaurant Association reported that sales at U.S. eating and drinking places were essentially flat in the first half of 2024 compared with a year earlier, after adjusting for menu price inflation. June's sales volume of $94.8 billion was $2 billion below the November 2023 post-pandemic peak in inflation-adjusted terms, the trade group reported.

At Bloomin’ Brands, operator of more than 1,400 locations under five full-service banners that include Outback Steakhouse, Carrabba’s Italian Grill and Fleming’s Prime Steakhouse, CEO David Deno said the company does not plan to slow investment in new openings, relocations and remodelings.

The company plans between $260 million and $270 million in capital spending this year, slightly below the 2023 level, after posting a 2.9% annual decline in total sales for its latest quarter. Same-store sales were down just 0.1% from a year earlier.

“We expect to remodel 60 to 65 restaurants and open 40 to 45 new restaurants system-wide this year,” Deno told analysts during the Tampa, Florida-based company’s latest earnings call. “Fifteen are new Outback Steakhouse restaurants, and one is a new Fleming’s that will open in the U.S.”

The company is also closely watching sales at existing restaurants after closing 36 older and underperforming U.S. locations during last year’s fourth quarter and shutting down nine restaurants in Hong Kong in the most recent second quarter. Deno said the company is keeping a close watch on costs that remain elevated for food, labor and construction, while still looking to minimize menu price increases that could turn away customers.

"What we’re seeing is the consumer is being pretty choosy on where they spend their dollars,” Deno told analysts, noting fine-dining restaurants, including its own Fleming’s chain, are now “a bit more challenged” than lower-priced casual-dining brands. 

Pasadena, California-based Dine Brands Global operates about 3,600 locations of Applebee’s, IHOP and most recently Fuzzy’s Taco Shop. The company is carefully weighing its development and menu planning after posting a 1% drop in total sales from a year earlier in its second quarter.

CEO John Peyton said Dine Brands’ flagship full-service brands “have a long history of weathering economic cycles,” and it will respond accordingly after same-store sales fell 1.8% at Applebee’s and declined 1.4% at IHOP. The company opened 16 restaurants and closed 25 during the latest quarter, bringing its first-half totals to 25 openings and 45 closings.

“We began the second quarter with a strong strategy to address economic challenges, build our appeal to guests, and build on the positive momentum we experienced toward the end of (the first quarter),” Peyton said during a call with analysts. He said a slowdown in sales that occurred during the last few weeks of the latest quarter “was somewhat unexpected for us,” though the company continues to scout sites for new locations. 

The San Diego-based operator of 2,200 Jack in the Box locations and 600 Del Taco restaurants nationwide posted a 2.2% decline from a year ago in same-store sales for its third quarter ended July 7, as total revenue decreased 7%. The company opened three restaurants and closed three during the latest quarter, according to a statement.

During a conference call with analysts, company officials said plans for the current fiscal year include 25 to 35 restaurant openings for the flagship fast-food burger brand and 10 to 15 openings for Del Taco.

Jack in the Box last month announced plans to open its first 15 restaurants in Georgia, targeting cities that include Macon, Augusta and Savannah. The company said it has long-term plans to grow its presence in the Southeast, with a total of 45 new franchise commitments in place for Georgia and Florida, though exact locations have not been announced.

The company also said it plans to return to the Chicago area, with as many as eight restaurant openings slated for 2025 and 2026. Jack in the Box said this week that its three most recent openings in Florida and Virginia, which took place in this year’s first half, set company records for first-week sales.