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Subscribe to RSSAs gas prices decrease, does that mean that people are eating out more often? CNBC's Jane Wells reports.
Also expected to feel the pinch are other casual-dining spots, such as Texas Roadhouse, Cheesecake Factory, Buffalo Wild Wings and Chili's.
Places doing well are so-called fast-casual joints, such as are Chipolte Mexican, Five Guys and Panera Bread. A Bank of America Merrill Lynch analysis says people are altering their dining preferences, opting for cheaper meals out.
"People want to trade down, they want to go to the lower-priced brands," says Tyler Vernon of Biltmore Capital Advisors.
On the bright side, restaurant hiring is growing, though slowly, and some food costs have dropped from a year ago.
KFC is also doing well. Zagat's 2011 fast food survey rated the company's fried chicken No. 1. And in China, KFC is popular for wedding receptions, Vernon says.
Olive Garden next week will start a "two for $25" promotion that offers unlimited soup or salad, two entrees and the choice of either an appetizer or dessert.
Applebee's and Chili's have been running "two for $20 promotions" for several years.
Reuters contributed to this report.
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If you eat all your meals out, of course you'll gain weight. That's why I limit my eating out in restaurants. As for the Olive Garden - I find them pretty good for the price. I'd never order spaghetti and meatballs there, but the chicken marsala and things you don't normally make at home are good. Not as good as in the North End in Boston, but edible. The salad and bread sticks are very good. I prefer my own cooking.
We still eat out a couple times a month....but we order for 1 and a salad and we share...this way we don't over eat and it is affordable for us. I do not eat fast food...yuk!
I choose Spaghetti Warehouse over Olive Garden, better value and taste. A lot of the local Mom and Pop places are better values than the chains and that is where we go. Support local business.