Hamburger Chain Restaurant Closures: 300 Locations to Shutter Amid Inflation and Foot Traffic Decline

A leading hamburger chain is preparing to close approximately 300 US locations by 2026, as inflation, shifting consumer behaviour, and mounting competition from casual dining restaurants continue to pressure the fast-food industry.

Inflation and Spending Caution Hit Quick-Service Restaurants

The fast-food sector, also known as quick-service restaurants (QSRs), has been significantly impacted by rising prices and economic uncertainty. With inflation driving up food and labour costs, and job losses making consumers more cautious about discretionary spending, dining out has become less frequent for many Americans.

According to Restaurant365's Midyear State of the Restaurant Industry, 91% of operators reported food cost increases in 2025, with more than half seeing hikes between 1% and 5%. Labour costs also rose, with 82% of respondents noting increases of up to 5%, and 15% facing jumps as high as 14%.

These pressures have led to declining foot traffic at several major burger chains, prompting strategic reassessments and cost-cutting measures.

Casual Dining Chains Blur the Lines

One of the most disruptive forces in the current landscape is the aggressive pricing strategy of casual dining competitors. Chili's, for example, has launched its '3 for Me' deal. This offering gives customers an appetiser, entrée, and beverage for as little as $10.99, a direct challenge to fast-food combo pricing.

Chili's marketing even compares its Big QP burger to McDonald's Quarter Pounder, boasting 85% more beef and a lower price point. This value-driven approach has resonated with consumers, leading to a 15.4% surge in foot traffic for Chili's in Q3 2025, according to Placer.ai..

In contrast, the burger chain facing closures saw same-store visits decline by 4.9% in July, 4.3% in August, and a steep 9.9% in September. The company's Chief Accounting Officer confirmed a 4.7% drop in U.S. same-restaurant sales for the quarter, citing reduced traffic as the primary cause.

Strategic Closures and Market Optimisation

In response to these challenges, the company has launched a comprehensive review of its operations, targeting underperforming locations for closure. CEO Cook stated that a mid-single-digit percentage of US restaurants will be shuttered, roughly 300 stores out of the chain's 6,000 domestic locations.

The closures are expected to begin in Q4 2025 and continue through 2026. Executives believe the move will improve profitability and drive more traffic to remaining locations within the same markets.

A Shifting Landscape for Fast-Food Giants

The closures reflect broader shifts in consumer habits and competitive dynamics. Casual dining chains are increasingly encroaching on fast-food territory, offering comparable speed and pricing with perceived quality advantages. Meanwhile, inflation continues to reshape how and where consumers spend.

Despite a 3.1% increase in global system-wide sales in 2024, the company's US performance has faltered. Executives hope that by consolidating operations and focusing on high-performing locations, they can stabilise margins and regain momentum in a volatile market.

As the burger wars evolve, chains that once thrived on brand loyalty and premium positioning are now being forced to adapt — or contract.