While rivals, including Applebee’s, Red Lobster, Twin Peaks, and a number of other chains, have struggled and even filed for Chapter 11 bankruptcy, Chili’s has been on a steady growth path.
“Chili’s is standing out with strong year-over-year visitation growth, boosted by compelling value promotions, operational improvements, and a renewed focus on customer loyalty. The brand’s ability to balance affordability with innovation has resonated with price-conscious diners, helping it outperform both its casual dining peers and broader industry benchmarks,” according to data from Placer.ai.
The numbers show meaningful 2025 market share growth.
“According to our visitation data, Chili’s share of the overall category has increased from approximately 6% to around 8%, a substantial jump,” added Placer.ai.
In addition, Technomic data shows that casual dining chains that have gained share in recent years are those successfully executing on value, operational efficiency, and menu relevance, while legacy brands with weaker differentiation continue to lose traffic and close locations, according to the Technomic Top 500 Chain Restaurant Report.
That’s a marked contrast to rival Ruby Tuesday, a chain with a similar menu and model that has struggled to find a path forward since its 2020 Chapter 11 bankruptcy.
Ruby Tuesday keeps shrinking
Ruby Tuesday filed for Chapter 11 bankruptcy in October 2020, according to court documents filed on PacerMonitor.
At the time, the chain operated about 750 locations, down from a peak of around 950.
“The NRD Capital Management-owned chain will be closing 185 stores that had been temporarily shuttered during the pandemic, or almost one-third of the restaurant chain’s unit portfolio. The remaining 236 company-owned restaurants will operate as usual while Ruby Tuesday uses the filing to “strengthen its business by reducing liabilities and emerge a stronger organization built for the future,” Nation’s Restaurant News reported.
Another 27 company-owned stores closed during the bankruptcy process.
“The bankruptcy allowed Ruby Tuesday to shed liabilities, including leases from closed locations that were significantly impacted by COVID-19, and to strengthen its core business of 209 corporate-owned and operated locations,” the company shared in a press release after it emerged from Chapter 11 bankruptcy.
Chapter 11 did not fix Ruby Tuesday
The company emerged from Chapter 11 with plans to develop virtual “delivery-only” brands “to capitalize on its core strengths and increased off-premise business as part of the company’s long-term growth plan,” the chain shared.
Delivery-only brands, known as “ghost kitchens,” have not been the industry savior that Ruby Tuesday and other operators hoped they would be.
“Ghost kitchens were kind of a victim of their own success. The pandemic gave the business model a false positive,” Alon Lagstein, counsel at law firm Carlton Fields, a firm that has worked with many restaurant brands and ghost kitchen firms, told Restaurant Dive.
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The costs of operating a ghost kitchen, he noted, are actually higher than they appear to be.
“You have a delivery fee that goes to Uber Eats or DoorDash. You have a higher price for the same item from the same vendor, because they have to cover the cut that they have to pay as well. If the restaurant is not charging a higher price, they’re eating the amount they have to pay to the third-party delivery provider,” he added.
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Ruby Tuesday faces ongoing stress
Chili’s has succeeded by offering a clear value proposition and spending significant marketing dollars to deliver that message to consumers.
Ruby Tuesday’s problems are deep-rooted in its inability to stand out, according to The Motley Fool’s Stephen Simpson.
“I believe that Ruby Tuesday’s woes have a simple explanation: what I call the TipsyMcStagger’s issue. Simply put, if you removed all appearances of the restaurant’s name, how many customers could readily distinguish Ruby Tuesday from Applebee’s, O’Charley’s, Chili’s, or TGI Friday’s?” he wrote.
Analysts have long pointed to a lack of differentiation as a structural issue in the brand’s performance.
“The problem may be easy to spot, but it’s considerably more difficult to fix,” he added.
Placer.ai noted that Chili’s has succeeded by taking market share not just from sit-down rivals.
“The data also highlights Chili’s growing momentum, as the chain has succeeded in pulling traffic from both casual and quick-service competitors,” according to the data company.
Advertising has been a key part of that, which may explain why Ruby Tuesday has continued to shrink.
“The one area of business where Ruby Tuesday is falling behind competitors is in its advertising. Per MediaRadar, the company spent less than $100 million in digital and national TV ads over the past year. MediaRadar also noted the company hadn’t advertised any new products since October 2024,” according to Money Digest.
Bankruptcy attorney Daniel Gielchinsky told Fox Business that he expects more closures in the restaurant space.
“Restaurants that exist today may not exist in five years. They’ll be off the map,” Gielchinsky said. Additionally, consumers will “see a lot of restaurants with a decreased footprint.”
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