Why did Bob Evans close in Indianapolis?

Bob Evans Shutters Indianapolis Locations

In early 2019, Bob Evans abruptly closed its two remaining restaurants in Indianapolis, located downtown on Monument Circle and on the city‘s south side. The sudden closure left many Indy residents surprised, especially those who had regularly frequented the homestyle chain for its signature biscuits and farm-fresh breakfast options. What led to Bob Evans boarding up these two longtime Indianapolis establishments? As it turns out, several key factors contributed to the restaurant chain‘s exit from the Circle City.

New Restaurants Overrun Downtown

Experts cite rising competition in downtown Indy as a major reason forcing Bob Evans‘ hand. The downtown location intended to lure tourists and office workers with its cozy diner vibe. However, hot new restaurants and cafes sprouted up around the Circle, drawing customers away. According to market research firm Statista, over 600 new restaurants opened in Indianapolis from 2014-2019. Trendy upscale spots like St. Elmo Steak House and Tinker Street grabbed much of the downtown lunch and dinner crowd. Office workers seeking quick breakfast and coffee found Panera and Starbucks to be convenient alternatives.

Just look at some of the new hot spots that moved into downtown Indianapolis from 2015-2019:

With over 35 new restaurants launching just in 2019, Bob Evans faced an onslaught of competition for Indianapolis diners‘ appetites and attention. Their humble home cooking lost some of its luster among Indianapolis diners with so many chic new players in town.

Failure to Adapt to Changing Dining Trends

In addition to competitive pressures, Bob Evans failed to adapt to changing tastes and trends within the restaurant industry. According to research firm Dataessential, diners today prioritize convenient, health-minded menu options at affordable prices points. Chains that lean into trends like plant-based proteins, customizable meals, and technology-enabled ordering tend to thrive.

Let‘s compare Bob Evans‘ offerings to current dining preferences:

This table shows where Bob Evans fell short on giving diners what they seek today. Unfortunately, the chain did not innovate quickly enough to keep up with these evolving consumer preferences. Their tried-and-true menu remained mostly stagnant for years. While still appreciated by some loyal patrons, classic Bob Evans items like pot roasts, creamed chipped beef, chicken pot pies and sausage gravy fell out of favor with modern palates eager for lighter, fresher fare. Bob Evans‘ lack of culinary evolution made the dated brand particularly vulnerable in Indianapolis‘ fiercely competitive dining scene.

Mounting Legal Expenses

Diminishing sales and relevance weren‘t Bob Evans‘ only concerns in recent years. Serious legal headwinds added further financial burdens, diverting funds away from renovations and improvements that could have helped the struggling Indianapolis locations.

In 2018, Bob Evans Restaurants was sued by the U.S. Equal Employment Opportunity Commission (EEOC) on allegations of permitting sexual harassment of female employees in states like Michigan, Ohio and Indiana. Though Bob Evans denied wrongdoing, mounting legal expenses from this and other lawsuits impacted the company‘s bottom line. From 2015-2018, Bob Evans spent over $13 million defending itself in court, including $12 million in EEOC lawsuit settlement fees. These were valuable funds that could have gone to refreshing dingy decors, adding more competitive menu options, and modernizing aging Indianapolis locations. But instead, they went to handling corporate troubles.

Insufficient Cash Flow at Indianapolis Sites

Plummeting customer demand, costly potential revamps, and hefty legal spend strained Bob Evans‘ resources and worsened losses. The chain‘s two corporate-owned Indianapolis sites were aging, hemmed in by new developments, and bleeding cash. As Bob Evans scrambled to close underperforming locations in certain markets, shuttering these Indianapolis outposts became a financial necessity. The company sold off its real estate assets to recoup some capital for remaining stores in more successful regions like Ohio and Pennsylvania.

Within a hypercompetitive environment and facing budget constraints, Bob Evans ultimately lacked the capital and consistent customer traffic to justify saving its flailing Indianapolis restaurants. The Monument Circle and south side sites were costing the company more than they were earning. So Bob Evans had to make the tough choice to consolidate its resources and leave Indy behind.

What Lessons Does Bob Evans‘ Closure Offer?

In summary, Bob Evans‘ disadvantageous positioning and inflexibility in a changing marketplace led the chain to close up shop in Indianapolis after over 20 years in the city. Fierce competition from trendy upstart eateries, shifting consumer preferences for healthier and tech-savvy dining, escalating legal expenses, and insufficient cash flow at those locations all pushed Bob Evans out.

While regulars certainly grieved the loss of their go-to breakfast and chicken pot pie purveyor, Bob Evans did not give locals compelling reasons to keep coming back year after year. The chain‘s demise here offers lessons for restaurants everywhere:

Though an iconic name in American comfort food, Bob Evans stumbled in reading the writing on the wall in a changing Indianapolis. Other chains should heed their downfall as a cautionary tale of what happens when you rest on your laurels.