Posted on 10/15/2008 12:30:17 AM PDT by 2ndDivisionVet
American restaurants are seeing a sharp decline in consumers and sales as the credit crisis continues.
Restaurants Hit by Credit Crunch
For the first time in two decades, the $550 billion restaurant industry is suffering from sluggish sales. Restaurant owners are being hard hit as credit lines for investment and operating costs dry up in the current economic recession. Increases in food and labor costs have also taken a toll on restaurant finances.
The current financial crisis has challenged owners of franchises and private establishments alike. Both have had difficulty attracting customers, paying employees and furnishing kitchens with the necessary tools and equipment.
Aaron Allen, CEO of international restaurant-consulting firm Quantified Marketing Group, told Time magazine, “The credit crisis is having a devastating effect on nearly every segment of the industry … This is the death knell for a number of restaurant chains.”
Fast food and upscale fast food spots that don’t have wait staff may fare better than full-service establishments as they can maintain lower costs.
A recent survey found that 38 percent of consumers have scaled back on restaurant visits. Of those who do dine out, 28 percent skip appetizers or desserts, and 21 percent are consuming less alcohol.
Restaurant critic Tim Zagat told New York 1, “It's not good and it’s probably the most threatening thing that has happened,” he said, referring to the current crisis. “But we’ve seen the industry, which is extremely strong, come through times that were equally difficult."
Zagat predicts that restaurants will continue to open, but notes that they will be “fewer and more value-oriented.”
Background: Restaurant industry in slow decline
The restaurant and bar industry has been suffering for much of 2008. Reuters reported that a survey published by Nielsen and Bevinco this summer said, “more than 40 percent of bar managers, bar owners, and bartenders surveyed … report they have seen a decrease in consumer traffic, while 25 percent note a decrease in the number of drinks ordered and 22 percent say that customers are ordering less expensive drinks.”
Related Topic: At-home dining boosts cookbook and cooking utensil sales
Market research firms have noticed that more people are preparing food at home to save money. But many have been eating in restaurants for years, leaving their kitchen cabinets devoid of the proper utensils and cookbooks. As a result, reports the Associated Press, “sales of cookbooks, inexpensive cookware and the basic foods needed to concoct a meal” are up, while magazines and Web sites devoted to cooking are thriving as new home cooks scramble to stock their kitchen shelves.
Miraculously, if Obama wins, we won't be seeing stories like this after Nov. 4.
I quit going to restaurants when they banned smoking. Geez, that’s gotta be about 15 years ago.
I will still do take-out occasionally..........
Several chain and locally owned restaurants have closed here in Reno including the only Krispy Kreme. It was reported today that office rental prices have dropped an average of 20% as well.
I don’t see drive thru restaurants hurting. At meal times there are always lines of cars for the drive through.
Why would they survey bartenders and other employees. it is the owners of restuarants and bars that know the real score.
Anyone who has ever worked in a bar knows the vast majority of drinkers order beer. What alcoholic beverage is cheaper than beer?
“Honey, we don’t have enough money to eat out... So why don’t you go spend a fifty bucks on cook books and 300 hundred bucks on cooking untensils. We don’t have the money to pay for the stuff since we are laid off. So put it on the credit card that we can no longer make the payments on.”
You don’t need a cook book to make scrambled eggs for breakfast and baloney sandwiches for lunch and dinner.
Bull CRAP.
We run two restaurants. They have been up by more than 40% this year over last.
Not long ago, a paying customer (and tipper) could at least go to the restaurant bar to have a smoke. Even that option is being taken away by the self-righteous, "I am sinless!" frauds.
Ding...ding...ding! We have a winner!
As I kept reading the article all I could think about is: It's about smoking stupid!
This sentence was particularly strong for our sentiments:
A recent survey found that 38 percent of consumers have scaled back on restaurant visits. Of those who do dine out, 28 percent skip appetizers or desserts, and 21 percent are consuming less alcohol.
Our FReeper friend Gabz has been talking and posting about this issue for years!
Mark
Sure we do...
Why should my meal be polluted by your nasty habit?
Good luck with that breathing tube...
Could you please stop driving so I don’t have smell your filthy exhaust?
It was an incredibly stupid law to strip business owners of the right to determine how to run their businesses.
On a recent visit to Carrabba's, we noted that the restaurant was only half full. In the past, it would have been full.
Restaurant prices are up, portions are smaller and service isn't what it used to be. All that makes dining out a less enjoyable experience than it used to be. The actions that the restaurants are taking to make a go of it seem to be self-defeating.
My Mother, who lives in a suburb of Chicago, reports much the same thing.
Ironically, the restaurant that sent the flyer closed its doors about 4 months ago.
The restaurant business is tough in even the best of times.
Nope. We live in a commie state, but out in the country..
The chown hall is just as crowded as ever. ;-)
What I noticed was a sharp drop in drive-in customers as gas prices escalated. And the drop in gas prices does not seem to have changed that, so far.
Chown...I gotta find one.
I was in a hurry to get to the chow hall for lunch.
We run two restaurants. They have been up by more than 40% this year over last.
I love it when FRiends have success. I hope it even goes up more next year!
McCuisine
Fast Food High Brow Menu:
McChat — Chateaubriand: 2 All beef loins special spice on a sesame seed bun
McSuzy: Crepes Suzette: breakfast burritos with orange marmelade.
McSole: Dover sole meuniere: fish sandwish with fish dipped in brown butter batter.
I was in a hurry to get to the chow hall for lunch.
Ours is pretty good. I read your page real quick and I see 2004 Iraq and then various dates all down the page...Have you been there that long? Not sure if you can answer the question (if not no problem), but thanks for your service just the same. That is some truly incredible sacrifice regardless of the time over there.
Yep. January 18, 2009 will make five years. I was going to do one year when I came in January 2004. LOL
I kept getting talked into coming back and have now been here in a variety of capacities - everything from participating in building coalition and Iraqi bases, mentoring and advising Iraqi government officials at the Ministry of Interior to infrastructure reconstruction which is what I'm mixed up in now.
But what's cool is that I've seen the worst of the war when it was at its highest escalation and now I'm seeing peace and a return to normality.
I see you're in bella Italia. Can you say where? I lived in Napoli (Pozzuoli) as an adolcscent Navy brat.
Thank you for your service. :)
“Do you live in a free state where you still have a smoking sections? “
I’m in Texas. Smoking is encouraged.
Looks like the restaurants need a bailout too. Some chains are too big to fail!!
I’m in Tennessee where our liberal Yankee governer put a statewide smoking ban in effect and I’m jealous.
That is really cool. I unfortunately have not been able to do a tour in Iraq. I am in Sigonella, Sicily and loving it.
“I quit going to restaurants when they banned smoking. Geez, that’s gotta be about 15 years ago.”
....time was, I couldn’t wait to light up after a good meal and have a cup of coffee....smoked Camels for years and loved ‘em.....quit 5 years ago....now I have to go to pulmonary rehab...I got COPD and only 79% lung capacity...see, I thought once you quit your body heals and you go back to having perfect breathing again...wrong! ....I wish all the smokers good luck....as for me, I ain’t going back to the butts....I want to hold on to what I got left...don’t want to have to carry that oxygen tank around.
From my anecdotal evidence:
1. Menu prices have risen about 20% in the past 2 years.
2. Restaurants are offering more specials during the week to get customers in during slow times (sort of counters #1, don’t you think?)
3. People may not be dining out less, but they are ordering less, looking for values and cutting back on appetizers and beverages.
4. Fuel costs hit the consumer this year and some discretionary expenses had to go; dining out is pretty much discretionary.
I’d eat out again if I could find a restaurant with a nicely ventilated smoking section. DH and I stopped eating out years ago, we used to eat out @3 times a week - now it’s take-out only for us in New England.
It’s absolutely crucial to enforce a top-down, who-cares-what-people-want blanket tobacco prohibition on all bars, clubs, and restaurants. “It’s for the children.”
This should help revitalize flagging sales no doubt.
Do you use a cellphone?...Good luck with that brain tumor....
Are you overweight?...Good luck with that heart attack
Have high blood pressure?....good luck with that aneurysm
I do agree with you regarding mixing smokers and non-smokers in a restaurant. The restaurant should maintain separate sections if they want. The difference is that I believe no government official should dictate this. If you don't like smoke and the restaurant has smokers, then don't go there, period. The market will adjust.
If you don't like smoke in meal....then patronize restaurants that don't allow smoking or have separate sections.....
We won’t eat out anymore. I’m sick of hearing cell phones ringing while trying to eat.
I take my grand kids to both those places and neither charges for condiments.
Not to mention degrading of American principles of liberty, with nanny state regulations trumping the rights of property owners. A little more freedom lost, a little more government control.
"Is it warm in here, or is it just me?" -the Frog
We go out to eat two to three times a week and the parking lots and restaurants are always busy. We usually have a short wait. This is Minnesota, and several bars have closed, but that is because of the smoking ban, not a poor economy. People here have plenty of money to spend in restaurants.
I live in the No. 1 restaurant hellhole in America. The carcasses of closed restaurants liter the roadways. And with good cause.
The food is insipid, over-cooked, under cooked, tasteless and the “chefs” haven’t discovered there are other spices beyond salt and pepper. A “fresh” fish dinner will land you a freezer-burned 4 ounce chunk of two year old salmon. Steak dinners are roadkill sprinkled with skunk spray and cooked over old rubber tires.
Whenever I travel, I hit the restaurants with a vengeance. I love eating out. I recently returned from a swing down to South Carolina and have found a new love - deep fried southern home cooking.
I want to move there. Fried chicken with rice and collard greens and peach cobbler. Yum! That’s heaven.
Remember, these places are often franchises. The one’s in my area are. It may not be corporate policy.
Mark
If Obozo manages to steal the election and get in the White House, there will be a lot more restaurants and many other businesses closing, due to his many tax increases and increased regulation.
Or maybe the USSA (United Socialist States of America) will just take over and run this businesses, rather than let them fail.
chown hall = town hall
Thought you were making a funny. How’s the food? Is sand good fiber?
I’ve felt the effects already. I work in an upper middle income community. I provide private instruction ( I won’t say what to protect the innocent, and me), and I recently had the parent of one of my best students saying they might have to cut back from an hour to a half-hour. He works in the restaurant biz and he says they’re getting killed. He’s going to hang in there this month because he’s a good dad, loves his daughter, she’s going great and loves it, but if things don’t improve (and I don’t expect them to), he’ll have to cut back.
Up north we call that "soul food." I presume that the African-Americans took southern cooking north with them during the post-Civil War migration. Soul food really is just good old southern cooking.
I don't suppose you want to venture into Detroit, from what I hear about the situation there, but you might try finding some little hole in the wall "soul food" shop in an area catering to African-Americans. That's the only place to find southern cooking in the north, unless you count Cracker Barrel.
A couple of restaurants have closed here in Louisville and I hear the pizza delivery business has slowed quite a bit.
Kind of scary. Several fast food restaurants in Evansville have closed. Two Rally’s, a Backyard Burger and a Popeye’s.
I haven’t noticed a lot closing, but over the last year and a half, I have noticed price increases and/or noticeably smaller portion sizes for the same price or more. Decreasing portion sizes and trying to pass it off for the same price ticks me off more than just raising the price, and I stopped going to several places that do this.
Examples: Outback Steakhouse I alwalys used to get the shrimp griller (kabobs). It used to be 3 huge kabobs that I could never finsh, now it is two small ones that don’t even fill you up.
Culver’s: my kids usually get a ‘free’ scoop of ice cream after their meal. They used to fill the cup so it was mounding over, now the scoop doesn’t even reach the top- it’s maybe 2/3 full. The hamburger patties are noticeably smaller, as well.
Taco Bell: the prices of all the meals have gone up noticeably and you literally have to use a magnifying glass to see any meat. Even my kids noticed that the tacos were all lettuce and tomato with a sprinkling of cheese and meat. Our family of five spent $27 there and we were still hungry.
This seems to happen everywhere we go (which is becoming less and less because I’m sick of getting ripped off).
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