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Running a restaurant chain is often assumed to be recession-proof. After all, people always need to eat. <\/p>\n
But over the last two years, shifting consumer habits have proven otherwise, forcing dozens of fast-casual chains to shutter locations or file for bankruptcy. <\/p>\n
Now, even growing chains like Portillo’s are trimming underperforming locations. <\/p>\n
The Chicago-style fast-casual favorite has announced several closures as middle-income diners tighten their budgets amid persistent inflation. With beef and food costs going through the roof, cash-strapped consumers are increasingly trading fast-casual meals for home-cooked dinners.<\/p>\n
Even the king of fast food is feeling the pressure. As I reported in September 2025, McDonald’s CEO Chris Kempczinski warned of an intensifying “two-tier economy,” where lower- and middle-income consumers face severe financial stress compared to their wealthier peers. <\/p>\n
Facing depleted budgets, these diners are cutting routine visits, like morning breakfast stops, and eating at home to save cash.<\/p>\n
To win back these consumers, “both QSR [quick service restaurants] and fast casual chains must evolve beyond basic value meals to win them back,” Placer.ai noted in its February 2026 report. <\/p>\n
Until that happens, restaurant operators are refocusing on margins — and for Portillo’s, that strategy means pruning underperforming locations.<\/p>\n
Portillo’s announces restaurants closures in the fourth quarter of 2026 <\/p>\n
Founded in 1963, Portillo’s is an iconic fast-casual restaurant chain that grew from a small hot dog stand in Villa Park, Illinois, to a chain with more than 100 locations across 11 states. <\/p>\n
It became famous for its classic Chicago-style comfort food, most notably its signature Italian beef sandwiches, “dragged through the garden” hot dogs, and rich chocolate cake shakes.<\/p>\n
Portillo’s reported its third-quarter earnings results on Nov. 5, revealing total revenue of $194.1 million, an increase of 7 % year over year. <\/p>\n
Despite solid results and upgraded guidance for the year, the chain’s management announced a decision to close some restaurants. <\/p>\n
“Lastly, we evaluated every restaurant in the system and made the decision to close a select group of underperforming locations outside of Chicagoland. This will improve portfolio quality, strengthen returns on invested capital, and reflect our commitment to disciplined growth,” stated Portillo’s CEO Brett Patterson.<\/p>\n
Portillo’s announces restaurants closures in the fourth quarter of 2026. <\/p>\n
Chicago Tribune \/ Getty Images<\/p>\n
Why is Portillo’s closing five to nine restaurants outside Chicagoland?<\/p>\n
The company posted same-restaurant sales increase of 1.4%, or $2.4 million, for the quarter. However, behind this improvement are higher prices. <\/p>\n
Portillo’s disclosed that the same-restaurant sales growth was driven by an increase in average check of 2.1% and partially offset by a decrease in transaction of 0.7%. Moreover, the higher average check was driven by an approximate 2.1% increase in certain menu prices. <\/p>\n
The chain said it plans to close a “mid-to-high single digit number” of underperforming restaurants, with the majority of closures in the fiscal fourth quarter of 2026. <\/p>\n
The company’s management explained that it has evaluated each restaurant’s sales performance, margin, and projected operating performance to determine those that are underperforming. <\/p>\n
Portillo’s highlighted that the decision to shutter these locations is part of the company’s continued efforts to “improve restaurant-level profitability, strengthen returns on invested capital and optimize its restaurant portfolio.” <\/p>\n
During the third-quarter earnings call, Portillo’s CFO Kevin Kalicak noted that with the closures, the company should likely “see an improvement in margins given that these are underperforming restaurants, and so those will lift the base naturally,” according to a transcript provided by Yahoo Finance. <\/p>\n
Management expects that targeting “2%-3% same-store sales growth” will keep “margins… flat to slightly improve” as the chain balances overhead costs with plans to “ramp up new unit growth in the next three years.”<\/p>\n
Kalicak noted that the company is unable to share the exact timing, locations, or cost, but expects these closures to result in material cash and non-cash charges, mostly in the fourth quarter of fiscal 2026. <\/p>\n
What these closures mean for consumers and the chain <\/p>\n
For consumers, the closure of five to nine Portillo’s locations means fewer nearby locations to enjoy Chicago-style hot dogs and char-broiled burgers & Polish sausages. <\/p>\n
However, it is important to mention that during the three quarters of fiscal 2026, Portillo’s opened seven new restaurants. <\/p>\n
Portillo’s Form 10-K filed with the SEC for fiscal 2025 reveals that the chain owned and operated 102 restaurants across 11 states, whereas the latest filing confirms that as of Sept. 27, 2026, it owned and operated 109 locations. <\/p>\n
“We plan to open one additional restaurant in the fourth quarter of 2026, which will be our second in-line location and will be located in Chicago, Illinois,” the company stated in the press release. <\/p>\n
Industry experts don’t see every restaurant closure as a warning sign <\/p>\n
Sometimes strategic downsizing is part of normal business operations of a restaurant or a retail chain. <\/p>\n
Restaurant-industry expert Jonathan Maze, editor-in-chief of Restaurant Business, describes restaurant closures as “a tried and true and often necessary part of the restaurant business.” He explains that chains often close underperforming locations to cut losses and support longer-term growth. <\/p>\n
Victor Fernandez, chief insights officer at Black Box Intelligence, similarly noted that restaurant closures can reflect market correction rather than necessarily indicate financial distress. “No one wants to say closing restaurants is a good thing. But the reality is the market is saturated,” he told Restaurant Dive. <\/p>\n
Even in retail, where consumers can get caught in attention-grabbing headlines highlighting a so-called retail apocalypse, from time to time a true story is not about a failure, but a business strategy. <\/p>\n
“In general, there is too much headline-grabbing [a]round store closures. People like to make a thing about physical retail is dead or dying, which is completely untrue,” according to Neil Saunders, a retail analyst and managing director of analytics firm GlobalData. <\/p>\n
However, restaurant closures don’t always tell the same story. While some chains shut down underperforming locations as part of routine business operations, others are forced to close stores amid mounting financial pressures, restructuring efforts, or bankruptcy. <\/p>\n
The following examples illustrate the different reasons fast-casual and fast-food chains have been shrinking their footprints between 2024 and 2026.<\/p>\n
Fast-casual restaurants and fast-food chain closures (2024–2026)<\/p>\n
Lemonade closed its final Northern California sites and announced plans to shutter all 22 remaining brick-and-mortar restaurants to pivot to ghost kitchens.<\/p>\n
Salad and Go closed all of its drive-thru salad locations and filed for Chapter 11 bankruptcy before its original co-founder stepped in to attempt a turnaround.<\/p>\n
Fazoli’s shuttered multiple sites following its parent company’s Chapter 11 bankruptcy filing and rejection of dozens of store leases.<\/p>\n
Federal Donuts & Chicken saw its largest franchisee close more than half of its locations across the Philadelphia market amid shifting consumer traffic.<\/p>\n
Blimpie continued shrinking its nationwide footprint, quietly exiting Connecticut after closing its final store in the state.<\/p>\n
BurgerFi filed for Chapter 11 bankruptcy in September 2024 and closed dozens of underperforming locations.<\/p>\n
Rubio’s Coastal Grill filed for Chapter 11 bankruptcy in June 2024 after abruptly shuttering 48 California stores.<\/p>\n
Noodles & Company closed dozens of locations across 2025 and 2026, with plans to shutter up to 40 more restaurants.<\/p>\n
MOD Pizza closed 27 locations and narrowly avoided bankruptcy by selling to a turnaround operator in mid-2024.<\/p>\n
Wendy’s targeted more than 140 underperforming fast-food locations for closure to remove low-margin units.<\/p>\n
Tijuana Flats filed for Chapter 11 bankruptcy in April 2024 after closing 11 locations.<\/p>\n
Roti Mediterranean filed for Chapter 11 bankruptcy in August 2024 amid weak downtown lunch traffic.<\/p>\n
Shake Shack closed nine company-owned restaurants in late 2024 to preserve operating margins.<\/p>\n
Related: The last mall music chain, FYE, keeps shrinking<\/p>\n
#Portillos #closing #locations #consumers #pay #visit<\/p>\n","protected":false},"excerpt":{"rendered":"
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