Restaurant Recession Meets February Debacle

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What does inflation have to do with it?

Restaurants should have done well in February. The economy created 235,000 jobs, according to the Bureau of Labor Statistics. The big gain was ascribed to the weather – the warmest February in 100 years. Weather-sensitive industries, such as construction, went on a hiring binge. The exuberance should have led to activity at restaurants. Compared to Februaries when people stayed home because polar vortices marauded much of the nation, this time, the weather invited them to head out.

But no. Folks stuck in the real economy and not benefiting from the surge in stocks, or those who’re paying with their last dime for the surge in housing costs, they’re cutting back on restaurant meals.

Same-store restaurant sales in February dropped 3.7% and foot traffic dropped 5.0% from a year ago, according to TDn2K’s Restaurant Industry Snapshot.

This comes after a January report, from which emanated for the first time in a while some sort of gloomy optimism, titled with delicious irony: “Flat Sales, Welcome Change for Restaurant Industry in January.” It went like this: “While same-store sales growth was flat (zero percent) in January, it represented a welcome break from the ten consecutive months of negative sales growth experienced by the industry.”

That gloomy optimism has now too fallen by the wayside, and it was “not a turning point in declining industry performance,” the report now specified.

Over the last three months – with the gloomily optimistic January in the middle of it – same-store sales fell 2.7% and foot traffic 4.7%.

“A macro view leaves little room for optimism,” the report said, whose data is based on sales from over 26,000 restaurant units and 145 brands, representing $66 billion dollars in annual revenue. “February’s results were among the weakest in the last four years,” it said.

The weakest region was the Southwest, where same-store sales plunged 7.6% and foot-traffic 9.2%. The least weak region was California where same-store sales edged up 0.5% and traffic fell “only” 2.3%. Across the nation, sales rose in only 8 markets and fell in 187 markets. A very broad-based decline.

Despite rising inflation, with headline CPI up 2.5%, guest checks inched up only 1.2% in February from a year ago, “the lowest rate in four years.”




By contrast, over the prior six months, checks had increased on average 2.3% year-over-year. February’s below-inflation increase was a function of:

  • More conservative pricing
  • Customer trade downs
  • And discount promotions

Note the second item, “customer trade downs” People bought cheaper menu items than before. One of the common reactions to inflation, when price increases are not met by sufficient wage increases. You still go to your favorite restaurant, but you trade down.

All segments experienced a decline in the rate of check growth last month. Casual dining and quick service were virtually flat compared with the prior year. The bar and grill sub-segment actually experienced a drop in average checks versus 2016.

For people who benefited from the surging stock market, things are not so dire. In terms of same-store sales, “fine dining” was the only segment where same-store sales rose. It includes pricey steak-house chains. According to Restaurant Business, the segment generated about $3.5 billion in sales last year, but that’s less than 5% of the full-service restaurant market. That segment grew last year and is still doing well.

The weakest segments were casual dining and family dining, where same-store sales fell 4.0%. Perhaps these folks don’t have anything to celebrate on a day when stocks surge. They just see the rising costs in their lives, while their wages aren’t keeping up, and pressures build on their disposable income:

Consumers are spending, but they are being battered by rising inflation. The rebound in energy costs may be helping that sector, but it is not doing much for households. Indeed, spending power has flatlined as wage gains are barely offsetting price increases. That is putting additional pressure on the restaurant industry.

And there might have been another cause for the February debacle. The IRS, struggling with a massive problem of identity theft and fraud, has delayed sending out about 40 million tax refunds to filers that had claimed either the “Earned Income Tax Credit” or the “Additional Child Tax Credit.” These credits go mostly to people who spend every dime they earn. Hence, those tax refunds might have funded some restaurant meals. And so they might fund them over the next few weeks – that’s the hope.

Or the refunds might be spent on healthcare and other things whose prices have jumped, leaving restaurants high and dry once again.

Inflation is now popping up as a topic everywhere where consumers buy things – not inflation as something that is good and desirable, but as something that bites: inflation in nondiscretionary goods and services that forces consumers to trim down their discretionary spending. Restaurants are among the last in line and get what is left over.

The report warns on inflation from another direction: “The higher inflation has given the green light to the Fed to raise rates, and if Trump spending and tax policies are implemented, rates are likely to rise faster than most currently expect.”

Rising interest expenses will eat up more of the incomes of our debt-slave consumers who are already struggling with higher prices, and they will have even less left over for discretionary items, such as restaurant meals.

Where has all the optimism gone? Read…  Atlanta Fed GDPNow Forecast Spirals Down in Amazing Manner




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  72 comments for “Restaurant Recession Meets February Debacle

  1. BradK
    Mar 11, 2017 at 11:46 am

    I would imagine this is of course very regional data. Here in La La Land, restaurant prices have been skyrocketing* for the past few years. Even older, established places are posting 30 – 40% increases. For two people to have a couple of burgers and a couple of beers — total — comes to $50+ with a tip. The price of a pint used to linger between $5 – $6, then almost overnight shot up to $8 nearly everywhere. It’s hard to find a decent burger for under $15. So no, that measly 2% raise isn’t going to drive restaurant traffic.

    *one thing to note about restaurant prices is that whenever they change, the establishment needs to print up new menus and update any online menus in addition to their POS systems. Since this is more costly than, say, a supermarket having to only swap out a shelf tag, restaurants often wait until they feel they have to (or want to) raise prices, then push them up %30.

    • Javert Chip
      Mar 11, 2017 at 6:39 pm

      The post explicitly said California was the “least weak” region.

  2. TheDona
    Mar 11, 2017 at 11:51 am

    January, February, and August are always slower restaurant months because folks are paying off Christmas and back to school purchases. This year they blamed the slow refunds…last year the weather. In reading earnings call reports there were some who blamed the shorter month, shifting President’s day, Valentine’s day and the Super Bowl.

    Note to CEOs:
    Jan and Feb are always slow, Feb is always a short month, there is always Pres. day and V. day in Feb. and you can use Super bowel excuse in either Jan or Feb…but it is always in one of those months.

    March slowing sales will be blamed on Easter being in April.

    Why is the “Sun was in my eyes” or the “Dog ate my homework” something to talk about?

    Moving forward Mr./Ms. CEO, if sales are falling YOY then you have too many stores, are serving crap, or both. And the main contributor, of course, is consumers have less money to consume (literally). This elephant in the room is never addressed. Perhaps instead of getting plastic surgery, veneers, or hair transplants, these CEOs should look into Cranial Rectal Inversion surgery instead.

    • Nik
      Mar 11, 2017 at 12:19 pm

      All of the Above is Correct…However,The SAME months are being used as Year over Year REFERENCE Points..true? January lets say is not being compared to June…lolol Dona..I read many of your comments and the Arguments are Solid to the Max…The Issue is most of the Elite People/Companies as well as Governmental Institutions you Refer to or Try to Re-Educate..Simply do Not CARE..As one reference point I would merely Present the Verifiable Long-term Treatment of On-Duty,Retired and Wounded Military Personnel in this Country…its beyond Tragic,aloha and thanks for reading

      • TheDona
        Mar 11, 2017 at 1:11 pm

        Thank you Nik! :-) And yes I agree the elite don’t care but they have to be somewhat nervous at this point.

        Regarding lack of Veteran support…it is beyond tragic. America should be ashamed. This issue is totally ignored and instead we are pelted daily about the “micro aggressions” inflicted on college students and the need for “safe spaces.” It is mind boggling.

        On a more positive note: When Starbucks vowed to hire 10,000 refugees, the Veteran owned Black Rifle Coffee Company vowed to hire 10,000 Vets. Bravo Even Hafer! https://www.blackriflecoffee.com/pages/about-us

        Let’s see how this plays out for Starbucks. I got online and bought coffee from BRC and so did a multitude of others I forwarded the story and website to. My vote with the pocket book.

        • Tom kauser
          Mar 11, 2017 at 1:19 pm

          Online coffee is lettuce picker lazy!

        • TJ Martin
          Mar 11, 2017 at 6:12 pm

          Being one of your so called elites myself and damn proud of it because I earned it thru dedication and hard work let me tell you I am anything but nervous [ because the impending doom on the horizon will hit you harder than it will us ] but I do care because I detest watching anyone suffer the imminent consequences heading your way

          As for the lack of Veteran support perhaps its time to aim your gaze and blame DC way . Seems to me the fortune I pay in taxes the majority of which goes to military spending that should be caring for those veterans

          In as far as StarBurnt’s ( which I despise ) in regards to Black Rifle Coffee they could not care less seeing as how BRC has a negligible presence and a minuscule share in the market at best . Suffice it to say BRC will be hiring 10,000 workers about the same time Trump actually ‘ drains ‘ the swamp . And seeing as how Trump IS the swamp.. that’ll be never .. on both counts

        • RickRod
          Mar 11, 2017 at 6:34 pm

          Just being a vet doesn’t mean that a person is somehow automatically going to be a great employee. I’ve served and i know that most people are trying to do the right thing but we serve with people who don’t give a shit too. Having served is no guarantee of being a good future employee but I hope that most employers find us good employees.

        • Mike G
          Mar 11, 2017 at 7:15 pm

          What kind of grievance-mongering media are you consuming where you are “pelted daily” about “micro-aggressions”? I work on a college campus and I don’t hear such things as frequently as that.

          What effect does it really have on your life if some student finding their way in the world gets overwrought about identity politics in a college newspaper?

        • rex
          Mar 11, 2017 at 7:44 pm

          I dutifully checked into purchasing Black Rifle coffee as this seems to be an enterprise we should all consider supporting. I discovered that the gentleman is charging thirteen bucks for 12 ounces of coffee! Not a full pound mind you, but just like the supermarkets he’s peddling a smaller bag and hoping we won’t notice the difference. Sure, I buy 12oz bags of good dark roast at the local Publix regularly- but usually for ’bout $8.00.
          So I’m supposed to buy his coffee and then pay an additional 8.50 for shipping? That’s OVER TWENTY BUCKS for twelve ounces of plain old coffee! I don’t think so. What’s this guy tryin’ to pull anyways? Maybe figurin’ on trading on soldier-worship? And he vows to hire 10,000 veterans? Hahahahaha

        • TheDona
          Mar 11, 2017 at 8:48 pm

          Sorry for steering you in that direction. It was a “you go Boy” statement purchase for me. I am a soft-heart for Vets and Police. Just glad we still have men/women who serve in this day and age. Bad draft era memories.

          However, I will keep tabs to see if he puts his money where his mouth is and report back. I keep a running list of “to follow up on stories.”

        • Nik
          Mar 11, 2017 at 10:40 pm

          Tom I understand the rational behind the comment..However,the lettuce pickers of America…are literally annihilating the ‘Brick and Mortar’ operations throughout this country. TJ I am surprised at the cavalier response to Rifle Coffee..? It seems they are trying and from your personal comments..you were Trying very hard to get were you are,and dare I presume you at one time had a lot smaller everything,than you do now…lololol Rex its a free country and Rifle is allowed to Charge what they want..true? I understand its high,get mine at Peet’s,though it will not stop me from sending them a donation..lolol As a Final statement..Doing the Right thing Personally is not about Dollars and Cents…its SIMPLY Doing the Right Thing according to the Situation one Inhabits..! thanks for reading,aloha

        • ERG
          Mar 13, 2017 at 11:27 am

          The elite don’t care and they are not nervous.

          And Starbucks sucks. Always has.

  3. MaxDakota
    Mar 11, 2017 at 12:42 pm

    The trend in LA is that not only have restaurant prices gone up by 30%, at the same time portions have gone down 30%, and on top of that, services are going away probably because min. wage is now so high. A place we used to go to shrank portions, raised prices AND stopped having table service, so that was just too much, we stopped going.

    Not that “service” is anything great in LA and you’re “expected” to tip 20-25% after waiting 15 min past your reservation to be seated and 30 min for your food. I think a lot of places became complacent during the boom years. Can’t see how they will survive when even people with disposable income stop going out.

    • Frederick
      Mar 11, 2017 at 3:45 pm

      Dakota you’re “expected” to tip 20-25 percent? WTF I always thought 15 was appropriate Here in Turkey my wife complains if I leave ten percent

      • crack
        Mar 11, 2017 at 11:02 pm

        Merican restaurants want you to pay their stuff wages on top of the food bill calling it a tip. And as everything else the merikan public complacent with this pure rip off. Here in Bangkok they don’t expect “tip” at all, at least in regular places. Only fancy units include %10 service fee and it is only because farang influence lake crappy Subways and McDees

      • kitten lopez
        Mar 12, 2017 at 9:44 am

        i don’t understand why women take what their men tip so PERSONALLY. it’s as if it’s coming out of their own tits or something. women are known for being the bitchiest cruelest tippers whereas men are known for being forgiving and generous when it comes to money/tipping.

        and yes. here in SF you’re also expected to tip even at take out, and sit down is 20% minimum or you’re an asshole they talk about behind your back forever, thus 25% means you’re “stand up” and kind in a brutal city where no one has anything left over for toilet paper.

        • Mar 12, 2017 at 10:31 am

          I love eating out in Japan. No tipping ALLOWED. During my first experience there in 1996, I left a tip (cash). The waitress came chasing after us, caught us at the elevator, and offered me the tip with both hands. “You must have forgotten something on the table,” she said.

        • rex
          Mar 12, 2017 at 12:30 pm

          My wife and I usually tip 20% or more and we give it to the server personally in cash- even though we nearly always pay the tab with a card. This puts cash directly into the server’s pocket giving them the option of declaring it as income for tax purposes- why force someone to pay anymore than the absolute minimum required by law?
          Now and again, if I go out to breakfast alone, I’ll tip a ten dollar bill on a nine dollar check. I don’t make a big deal about it but I know I’ve made some waitress’ morning. Extravagant you think? I guess some might say that but waitressing is some of the hardest work for some of the lowest compensation a person can do. Can there me much greater satisfaction than sharing what I’ve earned with someone who works harder for less?

        • Bixem
          Mar 12, 2017 at 4:35 pm

          I am in France, tip is rarely happened. lol, 20% of bill, are you serious?

        • Lee
          Mar 13, 2017 at 1:05 am

          Gee Wolf, you missed the best time to be in Japan for dat der dem ‘gaijin’ san……… “foreigners’ heaven’.

          You arrived just as the boom was dying!

          Yeah, eating out in Japan. Really good food at decent prices with pretty good service and no extra costs. Many places still only take cash for payment.

          Although there have been a few scandals with places using outdated food and mislabeling.

          On our last trip there I did notice though that portion size and the quality of the rice served with meals has gone down since we lived there.

          Simple solution was to buy a bag of rice and cook in in the apartment.

          Next trip to Japan already planned and looking forward to eating decent food:

          aji no hiraki, unagi, yakiniku, tonkastu………..

          And those discounted cooked food at the supermarkets before closing time!!!

    • Pavel
      Mar 12, 2017 at 10:40 am

      [Personal rant ahead]

      I went out the other night and the bill was about $70 (for 2) and the state/local taxes added $10. When they hand me the credit card machine it asks if I want to tip % or $ so I say 20%. It turns out that they are adding the 20% to the taxes as well — not just the meal! A $70 meal turns into a $90+ meal.

      The more serious problem is that in a lot of restaurants the bloody management takes a share of the tip that should go to the wait staff and kitchen. Plus the credit card company takes its cut.

      I went to an Indian restaurant years ago in London and the waiter confided nervously that *all* the tips went to the owner — b/c the staff were illegal and he could get them fired.

      What a world. Cook at home with fresh, organic ingredients and save tons of money and improve your health. That’s the answer! (And save even more money on alcohol!)

      When I go out in the future I’m going to leave cash tips.

      • Ethan in Northern VA
        Mar 13, 2017 at 12:05 am

        Local (Northern Virginia) walk up counter Italian place, clerk said the same thing. The owner takes everything from the tip jar — nothing goes to the employees.

  4. Karl Kolchak
    Mar 11, 2017 at 1:21 pm

    On a slightly different note still mentioned in this article, how is construction booming at a time when retail stores are closing right and left and restaurants are in dire straits? Something doesn’t add up, but I can’t figure out what it is.

    • Dan Romig
      Mar 12, 2017 at 7:11 am

      In Minneapolis and St. Paul there is a boom in apartment & condo construction. Near the U of M’s East Bank Campus, adjacent to the light-rail towards St. Paul, it seems like the whole place is being transformed into six to eight story tall ‘cookie-box’ dwellings. The trend is to have small studio apartments with tall ceilings and half lofts for bedding over work stations/computer desks.

      • Petunia
        Mar 12, 2017 at 9:04 am

        Expensive housing in colleges is the new trend, started a few years ago, and yes, there are REITs and derivatives associated with them. The colleges got a ton of money for screwing the students.

        • TheDona
          Mar 12, 2017 at 9:45 am

          Petunia, yet college enrollment down for 5th straight year.

          http://hechingerreport.org/college-university-enrollment-fifth-straight-year/

        • Marty
          Mar 13, 2017 at 3:24 am

          I think it’s an old trend. I remember an article in the boston glob about palatial dorms at BU. Can’t remember when, but strikes me maybe 10-12 years ago. Anyway, these palatial dorms followed a building spree of fantastic athletic facilities looking like a combination of country clubs and high end health clubs. As I recall, that trend was during the late 90s, early 2000s.

          I wrote an article about the college scam sometime in the late 90s for a membership newsletter. I was denounced as anti-education. called a loose cannon by some on the board of trustees and drummed out of the organization. They even hired a lawyer to do it. Ja, ja, ja…

          I must say that it’s gratifying in some ways to see more and more people waking up to the college scam. More gratifying would be witnessing the bankruptcy of some of the truly criminal universities. Doubt it will happen, though. Rock solid deep state connections.

        • Mar 13, 2017 at 8:23 am

          Yes, “student housing” has become a segment of commercial real estate that has been doing very well for investors.

      • TheDona
        Mar 12, 2017 at 9:41 am

        Dan, Built by REIT American Campus Corp; the largest builder, owner, manager of student housing.

        https://www.americancampus.com/student-apartments/mi/ann-arbor

  5. akiddy111
    Mar 11, 2017 at 1:30 pm

    Restaurant traffic growth started to plateau in 2015. We have seen lower y/y sales comps for several months. This February’s number is awful especially considering January’s (good) report showed flat comps coupled with traffic down 2.5%.

  6. Otto Maddox
    Mar 11, 2017 at 1:47 pm

    No mention of increasing minimum wages and price increases.

  7. Suzie Alcatrez
    Mar 11, 2017 at 2:04 pm

    There are too many food chains with too many locations serving warmed up Sysco products to survive.

  8. Mar 11, 2017 at 2:54 pm

    You also forgot crap food. In “the good ole days” when my wife and I wanted to go out for a good steak dinner we would head to Outback or Carrabas. Why grill at home when they could do better and we didn’t have to clean up afterwards.
    Also, my MD said I could only have one steak a month so make it a good one.
    We have stopped going to either years ago when meals that were great started being awful. Before both places had a waiting list. Now you can enter without a line. I guess many others like us have had the same experience.
    We have found an ” owner” owned steakhouse now and that has fulfilled our need. Pricier, yes, quieter and they take reservations as well.
    The quality restaurants will stand, others will die. I dated a girl
    when I was a lad whose father owned a popular steakhouse/ restaurant. He was there 24/7. He said he HAD to be there– not just to watch the till– but to make sure EVERYTHING was the way it should be. This is why the restaurants are failing. No one is there who has ” pride of ownership.”
    Never wanted to go into the restaurant business after I saw how he worked.

    • Peter
      Mar 11, 2017 at 4:24 pm

      Brilliant comment.

      Globalisation & mega chains stores have changed our lifestyles to the extent that to be family or individual hardworking business owners is rarely worth the effort anymore.

      • turlock
        Mar 16, 2017 at 7:42 am

        Off topic, but I see the same dynamic at Lowes and Home Depot. In the old days, smaller, local lumber yards had much higher quality products, great service, and a concerned owner who could fix problems because he wanted your business.. The big chains have a deliberate policy of, “no one is really in charge” You cannot find a real person to address your complaint. Take it or leave it. And, the prices suck.

    • Mike G
      Mar 11, 2017 at 7:08 pm

      You see this all to often with corporate chain restaurants — the temptation to cut corners and cut quality to improve the quarterly numbers becomes the first priority, the staff know it and the customers can feel it.

      I’d rather spend a bit more to find one of the dwindling number of places with pride of ownership, where they get the details right because it’s about more than short-term profits.

      • Pavel
        Mar 12, 2017 at 10:46 am

        I like places where the menu isn’t printed on plastic cards… how could any real chef be tied down to a menu that doesn’t change on a daily or weekly basis?

        Wolf (above) mentions the joys of dining in Japan where there is no tipping. There are lots of “izakaya” (bar/bistros) where the menu is changed daily and just written on a chalkboard or on paper. Many sushi bars have special boards with clips where they can hang little wooden signs to display what is available that day.

        The same in France and other EU countries–menus based on the chef’s imagination and the local seasonal ingredients.

    • 728huey
      Mar 12, 2017 at 3:54 pm

      I can say something about crappy food. Whenever I see an ad for Outback Steakhouse, Longhorn Steakhouse, Applebee’s, or Chili’s showing some Parmesan-encrusted or pecan-encrusted steak (or whatever topping), I know off the bat that the steak itself is probably a really crappy cut of steak, because a decent steak would not need additional flavoring. I can see why a family might pass on spending their precious discretionary dollars on manufactured crap posing as food.

    • Jeff
      Mar 16, 2017 at 11:59 am

      Maybe you should also find a new Doctor as steak is now a healthy food and carbs are out. Rib eye steak bought in bulk and cooked at home can make a fine meal several times a week.

  9. NotSoSure
    Mar 11, 2017 at 3:30 pm

    All the wealth is being siphoned to the coasts i.e. CA and NY. Still partying here in CA.

  10. unit472
    Mar 11, 2017 at 4:49 pm

    Lots of factors including all those new car sales, auto and health insurance premiums and perhaps, supermarkets grabbing a share of the ‘cooked foods market’. Grabbing a rotisserie chicken and some side dishes at the supermarket deli is just as good and a lot cheaper than going to a restaurant for the same food.

  11. VegasBob
    Mar 11, 2017 at 4:52 pm

    Last night, my cousin, her husband, and I went to the Olive Garden in Sun City West, AZ for dinner.

    Starting about 6PM on Friday nights, the place is usually packed and has 20-35 minute waits to be seated.

    We were seated immediately at 6 PM, and there were empty tables in the joint.

    Sun City West is a retirement community west of Phoenix with plenty of middle class and upscale housing. There aren’t very many “poor” people around here.

    So it’s pretty obvious to me that the condition of the US economy is not all it’s cracked up to be.

    It’s going to be brutal if the financial markets are ever forced to correct to economic reality.

    • OutLookingIn
      Mar 11, 2017 at 6:30 pm

      Thank you VegasBob for the feet-on-the-ground info.

      “It’s going to be brutal if the financial markets are ever forced to correct to economic reality”.

      We are now dangerously close to the arrival of “economic reality”.
      It will be a rude wake up slap to many! This coming crash will be epic.

    • interesting
      Mar 11, 2017 at 8:40 pm

      “It’s going to be brutal if the financial markets are ever forced to correct to economic reality”

      not likely, they know the drill….gamble all you want AND if you are big enough and lose enough uncle sugar will come to your rescue…..the thing is, I wonder if the American people will just sit back and take it when the next multi trillion $ bailout of rich people comes.

    • VegasBob
      Mar 11, 2017 at 11:42 pm

      Oh, I forgot to mention that the snowbirds around here generally don’t start heading North until the end of March. So the empty seats in the restaurants are not because the winter clientele has headed home.

      Also, I see an awful lot of houses for sale around here. So I’m wondering whether or not we’re ready to hit the end of the line for Housing Bubble 2.0…

  12. Michael Francis
    Mar 11, 2017 at 6:27 pm

    Went to an Italian restaurant that cut costs by employing cheap, Chinese pizza makers.

    Just about says it all.

  13. paul f
    Mar 11, 2017 at 6:48 pm

    When I go out to a restaurant my motto is “Eat like Royalty.” So sparingly I visit Burger King and only when I have coupons. If not for the coupons those royal meals would be non existent.

  14. Andrew Kelly
    Mar 11, 2017 at 7:13 pm

    Let’s not forget that banks of speculators have driven up food prices and futures, and there are failed harvests world wide. Vancouver imports basic vegetables from Chile!
    The restaurant industry has notoriously small margins or profits. It’s labour intensive, the public are fickle, and restaurants are at the mercy of inflationary food prices.

    • Meme Imfurst
      Mar 12, 2017 at 11:49 am

      Yes yes yes, everyone knows the speculators (with the help of free money to the elite via such Golden Banks as Wells and Deutche), but EXACTLY what has anyone done about it or will they ever? NO, this will not stop until everyone is out of business, dead broke, and there are no more tears to shed. 2008 was a dry run to see who stood up, your neighbors did not, your Politians only pretended to.

      My town is loaded with college kids right now. Hotels start at $500 a night, most require 3 days. Used to be these kids would have 8 to a room, no more. Now thanks to excessive college loans, they stay two to a room and eat out where a burger is $15.00 and lobster is $36 to $56 now and brag about it on the local radio shows as they cry “resist the fascist” and laugh. And, they DO NOT TIP ! This does not go down well where most have 3 jobs to make ends meet and rents are up 30% in one year.

      Don’t know when the Kaboom is, but it is over due everywhere.

  15. Mike R.
    Mar 11, 2017 at 8:28 pm

    Wolf’s mention of widespread tax fraud involving Earned Income Credit filing population (people that get money back from the government).

    I have helped a poor woman/family for a number of years and have done her taxes some of those years. She always got around 6K back via EIC. It was her payday/goldmine. Always blew it on stuff she hadn’t been able to buy throughout the year. For several years she has had a ripoff tax firm do her taxes and last year when she had them file her taxes, they informed her the IRS rejected it because her taxes had already been filed!! Identity theft. She had to file a police report, a special IRS form and waited 2 months to get her money. I helped here with all that.

    My guess last year was that some smart people had hacked into databases somewhere (perhaps tax prep firms) and filed early to get this money before the real people filed.

    The fact that the IRS pays out this money without double checking addresses or checking accounts the refund money is sent to tells you how messed up the system really is. The IRS just doesn’t have the resources to follow up on the myriads of discrepancies that would occur if they were really on their toes. Of course the criminals know this; just like in SS checks, etc. And millions of dollars go out to the criminals before honest folks even know.

    • Mel
      Mar 12, 2017 at 8:07 am

      This really is a thing. Brian Krebs, among others, has followed the problem:

      http://krebsonsecurity.com/2015/03/sign-up-at-irs-gov-before-crooks-do-it-for-you/

      https://krebsonsecurity.com/2016/02/irs-390k-more-victims-of-irs-gov-weakness/

      and other articles.

      The IRS’s problem is that verification and audits take time, cause delays, hold up peoples rightful refunds. Looks like the IRS streamlined thir process and created the ability to file on line, but, the Internet being what it is, that was a bad idea.

    • Duane Snyder
      Mar 12, 2017 at 11:38 am

      For what it’s worth, IRS data states number of returns filed this year is down 8.5 percent from this time last year (I think that equated to 5 million less filings). Don’t know for certain if that fact is related to fighting fraud but for some reason the number is down. Maybe 2016 number was fraud inflated?

  16. interesting
    Mar 11, 2017 at 8:32 pm

    here’s my take. restaurants are gouging on prices. Due to the minimum wage increase they are not raising prices a little they are raising them A LOT!!

    the salmon lunch special at one of my favorite Mexican places WAS 9.99 and is now 14.99. When i ask WTF was going on they used the wage increase as a shield……there is no F’ing way that should cost 50% more than 18 months ago.

    I’ve not been there since.

  17. Betty
    Mar 11, 2017 at 10:26 pm

    IMO the pharmaceutical industry is playing a huge role in destroying our world financial and physical . Lots of people incapacitated by sickness, weakness, pain, and depression .

  18. Betty
    Mar 11, 2017 at 10:40 pm

    I’m not kidding over 200,000 babies are on anti anxiety meds. Its crimminal https:// http://www.cchrint.org/psychiatric-drugs/people-taking-psychiatric-drugs/ Is there anyway to put a dollar amount on the damage done?

    • TArthur
      Mar 11, 2017 at 11:46 pm

      Betty,

      I’ll go out on a limb and suggest that a large percentage of the babies and children receiving thos types of medications are on state medicaid programs. There is also a premium payout to the family, per child, for the “medical condition” requiring those psychtropics … in some states

      • TheDona
        Mar 12, 2017 at 10:44 am

        TArthur, you are correct and the number of parents wanting their children to be mentally disabled in order to collect SSI benefits is staggering. Have a friend in the mental health field…. She said it is heartbreaking how many 6 year olds do not know shapes, colors or even what a book is. They are not mentally impaired…they just have never been exposed to the concepts. But the way the system works they get labeled as disabled and get benefits. The system is broken.

      • Betty
        Mar 12, 2017 at 4:55 pm

        I was at a friends the other day they were having a going away party 2 of the 4 kids there had a melt down every twenty min. I mean a major melt down. These people used to hold their parties in restaurants, not anymore you can’t take your kid anywhere if they have meltdowns. I believe they are both vaccine damaged. The grandma has been having breathing and heart problems she’s early 60’s and went on colostral meds a few months ago. Now she is having major problems. My point is you have 200,000+++ kids having anxiety attacks it effects the whole group, family and friends, you can 5x that number if you count parents, grandparents, That 200,000 are only the kids up to two yrs old. I think the statin drugs are muscle destroyers and millions of people are being incapacitated. I have no clue how to put a financial number to all this but it’s huge.

    • Truth Hurts
      Mar 12, 2017 at 1:59 am

      Sick people are customers of medical industry specially pharmaceutical industry; businesses love to increase the number of customers, wink, wink.

      The same way that you invest in food to make people fat, and then invest in gym to make the fattened old boys and gals to run to lose a few pounds.

  19. Lee
    Mar 11, 2017 at 11:13 pm

    How much does a Big Mac Medium meal cost in the USA?

    Here a ‘medium meal’ (Which I guess would be similar to a small meal in the USA) goes for around $A10.00.

    The local pizza joint raised the price of its ‘large’ pizza (which has decreased in size over the years as well) from A$10.90 to $A12.50 each.

    And to get that price you have to pick it up which means that you’ll have to buy some gasoline which went through its usual 20 cent per litre jump – right before the holiday weekend……..to A$1.399 a litre.

    For some strange reason the price of energy here keeps going up………….

    If you want to bake that pizza at home the electricity will cost you about 41 cents per kWh (In 2009 the price was 15 cents per kWh.) The price jumped up by about 6 cents per kWh on 1 January.

    • MC
      Mar 12, 2017 at 9:27 am

      Last time I checked, the two Big Mac menus were ChF10.00 and ChF13.00.
      Prices have come down a very long way since the ridiculous excesses of a decade ago and are bound to come down even more as Chinese “tourists” and Russian “businessmen” have disappeared (and I cannot thank Sakyamuni Buddha enough for that) and the currency peg disaster is finally starting to unwind. It took a while but maybe, just maybe, we are going back to some semblance of sanity.

  20. ALBERT CHAMPION
    Mar 11, 2017 at 11:16 pm

    over the last 4-5 years, the restaurant industry in houston has devolved.

    prices may have increased, but the training of waitstaff seems to have disappeared as a management function.

    i have the wherewithal and since suffering an injury to my right hip, i decided to eat out mostly.

    5 years ago, i could find a different, decent joint in the woodlands for each night of the week. now, it is down to 2.

    and the food in some of these joints has declined so precipitately that i am always surprised that they still have any business.

    the biggest crime…advertising PRIME beefsteaks on the menu when they are less than choice[probably only select]. tougher than cowboy boots. no marbling.

    when confronted, managers all say that the customers don’t want any fat. i think that might be a lie. but even if it is the truth, don’t advertise the beef as being PRIME.

    call it what it is.

    i have found a couple of honest and friendly joints. the waitstaff all knows me by name. i know all of them by name.

    places that i used to frequent discharged all its good waiters and waitresses. replacing them with bozos. and one has an exec chef that is praised by the houston restaurant review media, but is clueless about how to really run a purported “bistro” in the woodlands.

    the restaurant racket is a tough biz, that is all i can say. only the strong and wise can survive. i was in one that i frequent on friday night. usually a busy night. i was the only diner.

    i would say that there has been a lot of belt tightening in the woodlands. houston economy is soft. overpriced housing in the boom years, too high mortgages, too much spawning, too many of the “keep up with the joneses” cars all financed.

    when the effluent really hits the fan, will that micro-economy of restaurants take the pipe as well?

  21. Rexx Rock
    Mar 12, 2017 at 12:36 am

    Here in Victoria B.C.,I’ve noticed small mom and pop restaurants rising prices.$1.38 cad to buy 1 usd is to blame.I don’t eat out any more,way to expensive in Canada.Every one I know refuse to travel in the USA with the terrible exchange rate.High cost of living will really hit home for Canadians in the next 2 years.

    • Dan Romig
      Mar 12, 2017 at 7:30 am

      Don’t forget that the cost of beer after taxes is insane up in Canada.

  22. david
    Mar 12, 2017 at 1:37 am

    Guess I feel lucky my prices in Colorado Springs have only went up 10% where I eat out. So Far.

  23. ML
    Mar 12, 2017 at 2:25 am

    My initial response would’ve been to suggest more and more Americans becoming increasingly concerned about food quality but the figures don’t seem to bear that out. The honly article says people are eating out but not spending as much.

    Fine dining I can understand; the margins must be astronomical by comparison.

    As for rising costs, I thought the whole point of employing low cost labour is to reduce that percentage of overheads.

    On balance I stick to my initial feeling that Americans are becoming more discerning, and not just about what they put in their stomachs but also how much they pay for it.

  24. Dick
    Mar 12, 2017 at 7:49 am

    My observation is that there are far too many restaurants and stores in the US. Its been that way for a long time. I have been thinking that for 10 plus years. Its finally catching up and there has to be alot more consolidation for there to be a better balance. Also, the quality of food and service is generally poor at the big chains. People need too cook and eat at home more. It will be better for their bank balance and waist size.

    I guess the chicken is coming home to roost. You can’t out source, cut jobs and expect people to have money to buy overpriced junk.

    Okay Im done. Im rambling now. lol

  25. Ivy
    Mar 12, 2017 at 9:12 am

    Restaurants may benefit in a few cases from CRE market upheavals. As more retail outlets struggle and vacate, that dumps more supply onto the local market with likely rent reductions.

    For example, one local Chinese restaurant decamped to smaller quarters of a vacant restaurant for a fraction of the rent. The owner said that she could cut prices and increase food quality (although the latter was not quite as reassuring as she thought) at the same time. There are trade-offs when moving, including such aspects as traffic patterns and parking that impact what used to be regular customers.

    Restaurant sites tend to be purpose built with kitchens, etc, so a specific example. The same general downsizing or relocation dynamic may occur across other parts of the retail spectrum.

  26. Kreditanstalt
    Mar 12, 2017 at 11:38 am

    Same-store sales dropping only 3.7% whilst foot traffic is down 5% would seem to hint that lower-income customers are cutting back more than are the bigger-spending higher-income ones…

  27. HudsonJr
    Mar 13, 2017 at 6:47 pm

    I can only speak for Wisconsin, but it seems like Mom & Pop places are still pretty affordable. If we go out to a non-chain bar and grill it usually ends up to be about $35 for 2 parents and two kids. That would be 2 kids meals, and two adult meals (burger, hot sandwich, wraps, or wings + side) and 2 draft beers. If we go to a chain, that pushes $45-50 unless there are specials. Likewise there are local breakfast spots where we can all eat for about $25, it’s probably $40 at a chain.

    The problem with the chains is they are comparatively expensive, and a lot of times lack any one item that draws you in.

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