Restaurant chains are bracing for dismal fall and holiday dining seasons by cutting prices, trimming earnings and sales forecasts and shuttering locations.

The financial turmoil of the past several weeks has sharpened the downturn among sit-down restaurants that started more than two years ago. Starting this month, chains are launching more aggressive value promotions typically reserved for the slow post-holiday period.

"These are unprecedented times," says Julia Stewart, chief executive officer of DineEquity Inc., parent of the Applebee's and IHOP chains. On Monday, IHOP will begin selling all-you-can-eat pancakes for $4.99, a more aggressive deal than the chain typically offers this time of year.

Restaurant executives predict that pinched consumer wallets, coupled with high ingredient costs, are likely to hasten a shakeout among smaller restaurant chains and independents. Already this year, the Bennigan's and Steak and Ale chains -- both owned by Metromedia Restaurant Group -- filed for Chapter 7 liquidation and shut the doors of all company-owned restaurants.

For the eight months ended in August, sales at sit-down restaurants open at least 16 months declined 1.8%, according to Knapp-Track, which follows sales at about 10,000 locations. The hundreds of thousands of independent restaurants that account for most of the nation's 945,000 eateries generally don't have as much buying power or cash to withstand a steeper downturn.

Restaurant 15, located near Dodger Stadium in Los Angeles, plans to shut later this month. Open for about a year, the restaurant has seen its revenue on weekend nights cut in half since June, says Alex Eusebio, the executive chef and part owner. He has laid off more than half his wait staff in the last month.

"We're barely staying afloat," says Mr. Eusebio, whose restaurant serves dishes ranging from a $12 kobe beef burger with white cheddar cheese to a $24 filet mignon. "There are three restaurants in this neighborhood that have pretty much gone down in the last three months."

Brinker International Inc., parent of Chili's Grill & Bar, on Thursday pared its already bleak earnings forecast for the fiscal year ending June 24. Brinker expects that earnings per share, excluding some items, will decline 15% to 25% from the same period the year before. During its fiscal first-quarter ended Sept. 24, same-store sales declined 4% collectively at the company's four restaurant brands.

Ruby Tuesday Inc. reported a 97% decrease in fiscal first-quarter net income on Wednesday as same-store sales at its namesake, company-owned restaurants declined almost 11%. The company reduced its full-year earnings guidance and said it plans to close more company-owned locations than it opens this fiscal year.

"You will see more restaurant closings without a doubt, not just in casual dining but in fast food," says Ruby Tuesday Chief Executive Officer Sandy Beall, who helped found the chain in 1971.

To attract customers, Ruby Tuesday this month is lowering the price of its hamburgers by $1 to $5.99. The price of draft beer will fall by 25 cents to $3 and some mixed drinks will go to $5, from $5.45.

"People respond to value right now," Mr. Beall says.

Restaurants are cutting prices even though the cost of key commodities, such as beef and chicken, are expected to rise. Many chains are choosing to settle for lower profit margins because deals are necessary to draw customers. There's also a glut of competition among midpriced restaurants that forces chains to answer their rivals' deals.

James Brown, 46, used to meet a friend for a $10 dinner buffet two to three times a week near his job arranging displays at a department store in downtown Chicago. But in late July, Mr. Brown says he cut the dinners from his weekly routine. His electricity costs have increased along with the cost of cigarettes. He started bringing lunch to work with him and stopped eating at restaurants, he says.

"Either I'm going to have a telephone or I'm going to eat," says Mr. Brown.

So far, large fast-food chains have managed to withstand the restaurant downturn in part because they benefited from consumers trading down to cheaper meals.

Now, some casual dining chains are starting to tailor their promotions toward winning back those customers. Applebee's is running an advertisement for $5.99 lunches that says, "For the price of lunch in a bag, how about a real lunch instead, with people and silverware?"