The Restaurant Shakeout: What 2026 Earnings Mean for Retail Landlords

State of the Industry

By Ken Schuckman | Schuckman Realty Inc. | July 1, 2026

The restaurant sector is splitting in two. Value-driven chains are packing dining rooms and opening stores. Everyone else is closing them. For shopping center owners, that divide is the story of 2026 — and it sits right on your rent roll.

The latest earnings season made the pattern hard to miss. A handful of casual-dining brands are posting some of the best numbers in a decade. At the same time, once-dominant names are shuttering dozens of locations to stop the bleeding. Same industry. Opposite outcomes.

Here is what the numbers say, and what they mean for the value of an anchored center.

The big picture: growth, but thin

The National Restaurant Association projects industry sales of $1.55 trillion in 2026. Strip out inflation and real growth is just 1.3%. That is a soft tailwind. So the headline number is not the story. Who captures the growth is.

Consumers are still going out. But they are choosier. Diners are trading down, cutting visits, and hunting for value. That behavior is rewarding a few brands and punishing the rest.

The winners are expanding

Three brands stand out. All three compete hard on price and value. All three are opening locations.

Chili’s (Brinker International)

Chili’s has now posted 20 straight quarters of same-store sales growth. Its turnaround runs on one simple idea: a check average about $3 below its direct competitors. That has put Chili’s in a price fight with fast food at the $10 to $12 mark — and it is winning. Brinker raised its full-year guidance on the strength of it.

Texas Roadhouse

Texas Roadhouse grew same-store sales 7.1% in the first quarter of 2026, with traffic up 4.5%. Revenue topped $1.6 billion. The company plans roughly 35 new company-owned openings this year across Texas Roadhouse, Bubba’s 33, and Jaggers. It has been named America’s best restaurant experience two years running.

LongHorn Steakhouse (Darden)

LongHorn is Darden’s standout. Same-store sales jumped 9.5% in the most recent quarter, well ahead of the roughly 7% analysts expected. Food quality and consistent execution are doing the work.

Every brand gaining ground right now sells value at the door. The chains that skipped the value message are the ones losing traffic.

The losers are closing stores

On the other side of the split, the contraction is real — and it shows up in real estate.

Dine Brands opened 24 restaurants in the first quarter of 2026 and closed 40. That is net contraction across Applebee’s and IHOP. Bloomin’ Brands is closing weaker Outback units, not exiting markets — but the company took a $33 million impairment charge and cut its dividend to pay for the fix.

The key point for a landlord: these are underperforming units being pruned, not brand-wide collapses. Most of these boxes will empty one at a time, on lease expirations.

Darden: the bellwether

Darden, parent of Olive Garden and LongHorn, is the strongest large diversified operator. Blended same-store sales rose 4.6% last quarter and earnings beat expectations. But even Darden showed cracks. Olive Garden grew just 2.4%, below target, and the company’s guidance for next year came in soft.

Darden also flagged softer traffic from guests under 35. That is an industry-wide demand signal, not a one-brand problem. Younger diners are pulling back. Watch it — it is the kind of slow leak that eventually shows up in foot traffic at anchored centers.

What it means for your center

Restaurants are a core traffic driver and rent generator for anchored retail. The 2026 split changes who you want in your pad sites and inline space.

The restaurant sector is not shrinking. It is sorting. The winners want more space and the losers are giving it back. For owners who read the split correctly, 2026 is a year to trade up on tenant quality.

Sources

1. CNBC, “Darden Restaurants earnings beat estimates but Olive Garden growth weakens,” June 25, 2026.
2. Darden Restaurants, Inc., “Fiscal 2026 Fourth Quarter and Full Year Results” press release, June 25, 2026.
3. National Restaurant Association, “2026 State of the Restaurant Industry,” 2026.
4. Brinker International, Inc., “Third Quarter Fiscal 2026 Results,” April 29, 2026.
5. Texas Roadhouse, Inc., “First Quarter 2026 Earnings,” May 7, 2026.
6. Bloomin’ Brands, Inc., Q1 FY2026 results and turnaround plan, Restaurant Business, March–June 2026.
7. Dine Brands Global, Inc., “First Quarter 2026 Results,” May 2026.
8. Restaurant Dive, “A market of extremes: How 2026 will impact restaurant winners and losers,” December 5, 2025.

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