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Americans Still Love Eating Out. So Why Are Chain Restaurants Struggling?

Chili's Grill & Bar is going on a diet to fatten its sales - just one of the strategies casual-dining chains are using to reverse a slowdown in growth.

Americans Still Love Eating Out. So Why Are Chain Restaurants Struggling?

Chili's is slashing the number of items on its menu by 40 percent, to 75 from 125, to focus on its core offerings, such as burgers, fajitas and baby back ribs. The chain is trying the leaner menu in hopes of stemming a sales drop.

"We had to take control of what we could control," Chili's President Kelli Valade said. "We had potentially lost our way."

The entire sector of publicly held, mid-priced U.S. restaurant chains seems to be struggling to find its way back to growth. The brands face stagnant or slumping sales and shifts in consumers’ dining habits.

They include not only Chili’s, a division of Brinker International Inc., but also DineEquity Inc., which owns Applebee’s and IHOP, BJ’s Restaurants Inc. and Ruby Tuesday Inc. Cheesecake Factory Inc., a more upscale member of the casual-dining group, also has seen its sales growth stall for the first time in eight years.

“The past 24 months have been extraordinarily difficult,” Applebee’s President John Cywinski told Wall Street analysts last month.

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