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.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.