Restaurants in Worst Tailspin since 2009/2010

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This thermometer for discretionary spending is the first to react when consumers hit their limits.

Foot traffic at chain restaurants in March dropped 3.4% from a year ago. Menu prices couldn’t be increased enough to make up for it, and same-store sales fell 1.1%. The least bad region was the Western US, where sales inched up 1.2% year-over-year and traffic fell only 1.7%, according to TDn2K’s Restaurant Industry Snapshot. The worst was the NY-NJ Region, where sales plunged 4.6% and foot traffic 6.3%.

This comes after a dismal February, when foot traffic had dropped 5% year-over-year, and same-store sales 3.7%. The February debacle was blamed on $65 billion in delayed tax refunds from the IRS, as mandated by Congress, to allow the IRS to get its arms around a large-scale identity-theft problem. But by mid-February, the floodgates opened and record amounts of tax refunds started pouring out. By the end of February, the IRS was pretty much caught up. So March, with all this money sloshing around in bank accounts, was expected to be better. But no.

TDn2K’s Restaurant Industry Snapshot:

March’s results were disappointing for an industry desperately trying to reverse performance trends; sales have been negative in 11 out of the last 12 months.

This left first quarter foot traffic down 3.6% and same-store sales down 1.6% – with both food and alcohol sales down – the fifth quarter in a row of year-over-year sales declines. According to the report: “The last time the industry experienced a similar period was in 2009 and the first half of 2010.”

In Q4 2016 – which also should have been a stronger quarter, given the now dashed hopes of the economy picking up some steam – sales had already dropped 2.4%, “highlighting the difficult operating environment currently facing many operators.”

Average restaurant checks inched up in Q1 by 1.9%, down from the 2016 average increase of 2.3%. The report blames more promotions to bring in customers and “conservative menu price increases in response to continual declines in traffic.”

In the group, the best performers in the quarter where upscale casual, fine dining, and quick service. The weakest segments were family dining and fast casual. For them, it’s tough out there.




The data underlying TDn2K’s Restaurant Industry Snapshot is based on weekly sales from over 26,000 restaurant units and over 145 brands, with $66 billion in annual revenue. The crummy March performance was doubly disappointing:

  • The industry had hoped that the flood of IRS tax refunds would goose March sales, but that didn’t happen.
  • Easter holiday “represents a potential loss of sales” for the largest segments of the industry – quick service and casual dining. The holiday fell into March last year but into April this year. So this should have helped in March, but it didn’t.

It’s not totally surprising, given the decline in traffic and sales, that year-over-year job “growth” at chain restaurants was a negative -2.3%, with about 60% of the restaurants in the data reporting lower employee counts than a year ago. “This may not be good news for service scores and guest satisfaction,” the report observes dryly.

As always, there are winners and losers. According to Wallace Doolin, Chairman and founder of TDn2K:

“Our research does show there are real winners with impressive results. These ‘Top Box’ performers are across the segments, size and ownership of the brands. Brands investing in the customer experience and the employee experience with technology and staff development are stealing share to grow their businesses.”

Everyone who goes to restaurants has figured this out. Lousy service, crummy food, a mediocre experience, and menu prices that are rising too fast are all excellent methods of driving customers away. But that would only shift traffic from losers to winners.

The persistent sales declines – despite price increases – in the overall chain restaurant industry over the past five quarters must have other causes. This could be in form of competition from other sectors not represented in these numbers, such as taco trucks and independent restaurants, cafés, and delis.

Or it could be a reluctance or inability to eat out when money is getting tighter due to cost-of-living increases in other areas, such as rent or healthcare, as wages for large parts of the population are stuck. But then why didn’t these folks splurge on a hamburger in March when the tax-refund money was beckoning? Or was that money used to catch up on past-due car payments and rents?

Restaurant spending is a thermometer for discretionary spending, which varies with how well consumers are doing, and it’s the first to react. When consumers hit their limits, the first things they cut are discretionary items, such as eating out. So this is another warning sign percolating up from beneath the surface.

And there may well be more beneath the surface. Read…  Great Debt Unwind: Consumer Bankruptcies Jump, First since 2010. Commercial Bankruptcies Spike




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  85 comments for “Restaurants in Worst Tailspin since 2009/2010

  1. akiddy111
    Apr 13, 2017 at 7:17 pm

    Restaurant same store sales in Q1 are 2.5% higher (nominal) than in Q1 2012, according to some TDn2k numbers I ran just moments ago.

    Gas prices in Q1 2012 were higher than they are now:

    $3.60 in march 2012 v’s $2.30 in march 2017.

    The data tells us that the majority of restaurant businesses are having a tougher time with each passing year.

    Malls, Restaurants, Autos, Condos.. what’s next ?

  2. Apr 13, 2017 at 7:23 pm

    Last time I was at an Outback Steakhouse was a year ago. Ordered a ribeye. I told the waitress that she brought me a sirloin. I said no marbling, no juice, did not taste like a ribeye should. She took it back to the kitchen and the manager came out and insisted it was a ribeye. I asked him to show me the difference between a ribeye and a sirloin. Did not know the difference. I cut the steak several ways. I showed no marbling, no fat, no juice. He insisted it was a ribeye. I walked out. I did not pay. I will never return.
    I know why Outback is closing their restaurants. More former customers like me saying no.

    • Dogstar
      Apr 14, 2017 at 3:30 pm

      I understand your frustration but on some level, shouldn’t you just be happy that you have the means to go out and buy a steak of any kind? And to walk out and leave it?? Its Outback, not Manny’s. We’re so spoiled. Like the hysterics over light bulbs we saw a few years back. “Its just not the same tone of light that I like!”.

      Its never enough.

      • economicminor
        Apr 14, 2017 at 3:50 pm

        It may not ever be enough for many but I would like to feel like I got what I thought I was paying for. When I get a tuff stake or even an over done hamburger for much more than I felt it was worth. I think I have a right to be angry and frustrated.

        I don’t need perfection but at least do your best for what I pay for. I am personally tired of slipshod and rip offs. And corporations seem to think they can get away with bad behavior more than ever. Must be that their heroes in government and Wall Street get away with it, setting a bad example so they all think it is just the normal way to do business.

      • Michael Fiorillo
        Apr 15, 2017 at 10:27 am

        Dogstar, don’t people deserve to get what they pay for? Ribeye is a different and more expensive cut of meat than sirloin, and the fault is with the company for 1) trying to get over on a customer, and 2) hiring uninformed (and no doubt grossly overworked and underpaid) staff.

        By your reasoning, we should be content to go back to the days of “The Jungle,” when human fingers were canned along with the potted meat.

        Why? Oh, that’s right, because Markets.

    • Pat McKim
      Apr 14, 2017 at 7:19 pm

      Ironically and strangely Outback is one of the most popular restaurants in Brazil. I was there just two days ago. The food was excellent. Half an hour wait. Service some of the best in Brazil for chain restaurants. Everything is very good there.

      It’s strange how this works, but I think the US has too many chains and just too much capacity and there a novelty factor. I don’t think its about systems. In the same way people buy Tesla, Obama or some other “hope” This is musical chairs.

    • Scott
      Apr 22, 2017 at 8:31 pm

      I worked at Outback from 2005-2009 in college. When I first started it was an incredible restaurant. The crew got there at 5am every day and started prepping. Everything was made in house and from scratch. It was really interesting to see the changes when the recession started. We were no longer making our fries from scratch. Instead we switched to frozen. All kinds of “little changes” like that kept happening. Our products seemed to consistently become more inferior. I read they shut almost 100 stores down last year.

  3. Pavel
    Apr 13, 2017 at 8:05 pm

    It seems that in California at least some restaurants have just gotten 3% more expensive. I was in San Diego the other day and had lunch at a downtown bar & grill (Karl Strauss, a well-known local brewery). A big sign was posted on the wall titled SURCHARGE and stated:

    We support the new minimum wage and supplemental labor ordinances for our team. In lieu of a menu price increase a 3% surcharge is included on all guest checks.

    I’m not sure how a 3% “surcharge” differs really from a 3% “menu price increase” but in any case the prices went up. IIRC the 3% was added after the state tax as well, which seems a bit cheeky.

    On the same subject, I read in a Canadian paper the other week that a study of the impact of higher minimum wages in Alberta ended up in higher hourly wages but in fact *lower* weekly paychecks — the employers cut the hours of the employees. Who could have predicted?

    • Jim
      Apr 17, 2017 at 1:37 am

      This is a way of attacking workers and their supporters for demanding decent wages. Why doesn’t the restaurant have a surcharge for other basic costs of doing business, like meat, produce, electricity, or water? When faced with a surcharge like this, a LOUD protest to the management is clearly in order.

  4. Mike
    Apr 13, 2017 at 8:29 pm

    I will offer a counter-point – I certainly can afford to go out to eat, but rarely do so now. I try to eat healthily these days.

    It turns out, most restaurants are now unpleasant for me to eat at – everything is too salty. If I have to go out to eat, I’m going to go to a local restaurant to help the small business owner rather than to a chain. I can’t be the only one who feels like this …

    • FirstTimeHere
      Apr 13, 2017 at 9:54 pm

      I, too, can afford going out to eat, but avoid it because food is overloaded with salt, fat, and who knows what. And that is particularly true for chain restaurants (that I avoid, unless I am part of a group and I have no choice). I always try to spend my money local, but some local choices are insanely expensive. It does not matter whether you have the money to pay for it or not. One has to ask whether the price you pay is related with the value you get (food, experience, etc).

      • hidflect
        Apr 14, 2017 at 5:35 am

        My issue is sugar. Plenty of meals have it ladelled in to boost taste and hide the salt. Medically, I can’t eat sugar in my diet and I doubt any restaurant is going to make an entire meal from scratch for me. I worked in kitchens. Most of the food is pre-prepped and just combined together upon ordering.

        I think the reason for restaurant declines is rents. Probably a third of your plate is paying that. So salt and sugar become the cost saving measure. So less people go and the downward spiral starts.

    • TJ Martin
      Apr 14, 2017 at 8:32 am

      Mike . You’re not by a long shot . Same here . Affording a good meal at one of our local restaurants [ we refuse to go to chain restaurants ] is not a problem . And even a couple of years ago we’d go out … oh say three to five times a month or more on average . Whereas now we barely go out to eat once a month . Why ? The proliferation of sugar [ a migraine trigger for me ] in almost everything it seems . Overly fussy and complicated dishes [ as we’ve aged we’re more focused on quality ingredients well crafted and cooked with skill ] Escalating prices as service declines . Favorite restaurants that could be depended on for a fine dining experience lapsing into mediocrity . etc – et al – ad nauseam .

      So for us its the secondary effects of a declining economy thats keeping us at home as once quality restaurants fall into the abyss of substituting cheaper ingredients over quality in order to attain flavor [ sugar is at the top of the list ] .. no longer able to hold onto quality staff cooks and chefs [ exacerbated by the ‘ crackdown ‘ of this administration on illegal aliens ]

      So these days we spend more time cooking at home .. beyond vacations [ and even then we now rent a condo rather than stay at a hotel/B&B ] hardly ever eating out .

      FYI ; Though not a chef by vocation I did train as a chef in my youth [ as a ‘safety ‘ net ] who appreciates a properly cooked hamburger as much as a gourmet meal [ e.g. The Rippert/Bourdain axiom ]

    • Apr 14, 2017 at 8:40 am

      I agree. The chain restaurants offer predictable mass consumption food and usually too much of it. I don t think the quality is as good either: their meals are pre cooked or partially pre cooked..or taste that way. Bottom line our living standard / disposable income diminished a lot since 2008 and we only go to reasonably priced local restaurants we know; no experimentation, and above all, no formula food and decor. But we also go out less than half as often as before 2008, when we had more money and more trust in the economy (and those running it).

    • Steve
      Apr 14, 2017 at 9:58 am

      You hit the nail on the head. At 55, the best way to lower health care is to take care of one’s self. Buy organic, natural foods and rediscovered home cooked meals. Best decision made.

      And I agree with the too much salt comment. After six to nine months of healthy eating, any commercial food taste like licking a salt block. Not thanks, I’ll pass.

      Great comment.

    • David
      Apr 24, 2017 at 5:49 pm

      Here in the Detroit metro area there are thousands of mom and pop delis, Coney restaurants, fast casual eateries, shawarma shops, Thai foods, Chinese cuisine, salad shops sushi, and even Ethiopian fare. Whenever we go out to eat we like to frequent the locals. There’s a family owned Mexican restaurant that we followed from one location to the new one after a fire at the old one.

      Southeastern Michigan has become a Mecca for foodies from all over the world – come to Michigan and eat with us!

  5. trmist
    Apr 13, 2017 at 8:47 pm

    Restaurant food is typically not as good as homemade meals . Lower quality ingredients and an over reliance on salt, fat and sugar make restaurant food less nutritious. Further to justify the high price of a meal they give you a larger portion than you would get at home, you end up over eating.

    Investing in meal planning and cooking skills is the best thing anyone can do for their personal wellness.

    • John M
      Apr 13, 2017 at 9:14 pm

      Trmist

      1/3rd of Americans will eventually concur with your viewpoint when they graduate from being pre-diabetic to type 2 diabetic. Only then will they embrace healthier eating. In the meantime, unless I spend $80 or so on dinner in a restaurant my own efforts at home will be most often better than going out to eat.

    • Apr 13, 2017 at 11:50 pm

      I was talking to a restauranter at a very posh high-end restaurant in Oz (overlooking the Brisbane River) a number of years ago. He told me that the total cost of food on the plate must NOT exceed $5 (for a entree price of $25-$60). The rest of the plate pays for rental, staff, taxes, furnishings, etc. The amount they made off the *beverages* was pure cream (i.e. profit).

      He also told me that when steak goes bad (you reminded me of this with your story, @Dr Pangloss), they hammer it out, crumb it and sell as wiener schnitzel. Since that day, I’ve only ever eaten homemade schnitzels!

      • Intosh
        Apr 14, 2017 at 4:44 am

        It’s one of the “best” old tricks from restaurateur’s playbook. Battered or breaded and then pan fried or deep fried the low quality food. Excellent one-two punch to KO expenses: the batter/bread is super cheap, the frying masks most of the bad food’s smell and taste and best of all, most customers love fried stuff!

        Smart people stay away from battered and deep fried menu items, escpecially at a buffet. Food for suckers.

      • Lee
        Apr 14, 2017 at 6:37 am

        Been in Oz now for 22 years and I can really say that the food in most eating establishments here is terrible and costly.

        Usually huge portions, but low quality and the taste is bad.

        It takes forever to find a decent place that you can go back to over the years.

        A new steak house opened down the road from us and the better half and the kid tried it out while I was at work one day. They said it was pretty good.

        So went there as a family and they had the lunch special and I ordered a steak by itself off the menu. My steak tasted like some kind of mystery meat. The steaks on the lunch special were outstanding.

        Been back there numerous times and the lunch special steaks are still outstanding. The other items vary from time to time. Sometimes very good and sometimes just ok.

        Last week went out for a quick lunch as the better half didn’t want to cook. Had a couple of Japanese dishes at a place (run by Chinese, of course!!!) we hadn’t been to in ten years or so. The food was terrible – the only thing I can say about the food was that it was hot. Never going back again. A total waste of money.

        Several years back tried an American branded steak house here as they advertised “Prime Rib”. It had been years since I had a good prime rib in the good ole USA.

        (At a golf course clubhouse for about US$12.00 for the meal and the meat was outstanding.)

        Ordered the prime rib and boy was it bad. Another bad experience. Crossed off the list.

        Why in the world can’t most places here cook up a decent meal at a reasonable cost?

        Ozzies seem to think that the food here is high quality and good tasting. it isn’t.

        Even the stuff from the supermarkets is borderline. Especially the meat. One day the better half brought home some beef on special from the supermarket and I thought oh well here we go again.

        It was unreal – nice marbling, soft, tender, and it tasted just like nice Japanese wagyu. Somebody must have made a mistake. Best beef I’ve ever had since I moved here. Haven’t been able to find a similar cut of meat in that brand since

        Spent ten years in Japan and can only remember one or two bad experiences there.

        We are traveling to Japan later this year and one reason we are going is to eat decent food!!

      • interesting
        Apr 14, 2017 at 1:11 pm

        Never get the Orange Chicken……it’s yesterdays mushroom chicken. And based on the texture of some of the Orange chicken I’ve had I’m included to agree with that statement.

    • economicminor
      Apr 14, 2017 at 10:10 am

      My wife and I do eat out occasionally but often split a meal with an additional salad or soup. For us so far, it isn’t the cost. And WE haven’t really changed our habits about this for years so it isn’t us causing it.

      We are older and live a healthy rural lifestyle so we make trips to the city to get stuff. Mostly food and it is always a full day trip for us so we often eat out at least once on those days. We also like to travel and traveling often makes us eat out. Breakfast is always hard because when at home we eat lots of berries and fruit with high fiber cereals and yogurt. Not on the menu in most restaurants.

      I also stay away from chain restaurants. I know why people go to chains, they know what they are getting. I also know what I am getting and would rather not. We are more adventurous so eating at a restaurant we have never eaten at before is exciting even though sometimes we say, never again. We do have our favorite family run places though.

      ZH did a piece this morning about the decline in retail sales and posted a chart that shows the pretty continuous decline in in weekly earnings since the beginning of 2015.. When looking at that chart, it isn’t hard to understand why restaurants are having a hard time. Declining incomes for the wage earner is why the auto industry is having trouble and why retail stores are closing. Debt is up and incomes are declining. And the idiots at the FED are raising rates?

      http://www.zerohedge.com/news/2017-04-14/retail-sales-decline-second-straight-month-real-earnings-stagnate

      Surely we are heading into a recession. If we aren’t already in one. The US really didn’t need a recession while we are in a depression.

    • Michael Fiorillo
      Apr 15, 2017 at 10:31 am

      Wait, I thought sugar, salt and fat were the three major food groups.

      You mean they’re not?

  6. jb
    Apr 13, 2017 at 9:13 pm

    the major variable cost that restaurants can control is the quality/quantity of the food they offer. You know when a chain is cost cutting when they offer you a loaf of bread as a before meal entry. I can relate to your experience. However if you email your dissatisfaction to corporate headquarters via their corporate website you will almost certainly will receive a reply/
    voucher/or discount certificate for your next meal there. But you may still might have the same experience. On a side note i am wondering if “on-line’ food sales delivered to your home (e.g blue apron et al )are eroding the above mentioned sales data. bon appétit

  7. Suzie Alcatrez
    Apr 13, 2017 at 9:16 pm

    I went to PF Changs Monday night to celebrate a friends birthday. Last year, the restaurant was full at 7pm and there was a 10 min wait for a table.

    This year, the restaurant was half empty.

    • milking institute
      Apr 13, 2017 at 10:56 pm

      PF Chang is in big trouble just like many other restaurants,used to be the hot spot for happy hour,now just another struggling chain.as foot traffic slows they need to cut cost and services to meet the bottom line. the customer notices the decline in quality and looks for alternatives. it’s a vicious cycle they can not escape. my business is doing the best in years but i look around and feel something is very WRONG with this economy. perhaps it’s the ever widening gap between what used to be a middle class and the very prosperous 25% at the top. this is NOT a good situation for any society. don’t really care much anymore as i will be riding into my retirement paradise soon but i feel for the kids their future. was at Lowe’s today and observed a couple of corporate suits getting a demonstration for a new autonomous robot floor cleaning vehicle. wow,i said to myself,there goes another job,do we really need people at all? what for?

      • KR
        Apr 13, 2017 at 11:20 pm

        I hope you have a secure retirement. I just talked to a couple last week on the subject. The husband was a pilot for United. He retired at 60 but United pension fund went belly up. He now gets 20 cents on the dollar. Radically changed his retirement plans. I can’t help but think this will be the rule and not the exception in the coming years. We will see.

        • Meme Imfurst
          Apr 14, 2017 at 6:52 am

          The only ‘pension fund’ that will be standing in the end is the US governments. Why? They can print the paychecks with your money, your children’s money, your unborn children’s money, your unborn unborn children’s money.

          100 to support 1 government worked is now 6 to support 1. Now we are talking about who can afford to go out to eat?

        • Anon
          Apr 14, 2017 at 11:06 am

          The pilots’ union was far too greedy. I have no sympathy for the pilots. Maximum benefits for different ages for retirees of bankrupt companies covered by the PBGC can be found here:
          http://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee.html

      • economicminor
        Apr 14, 2017 at 10:12 am

        Some of the trouble couldn’t be that many chains overbuilt just like other retail. Built thinking they could take away their competitors customers leaving neither with enough.

        • John M
          Apr 14, 2017 at 12:04 pm

          Meme Imfurst

          That’s the whole point on why precious metals had their run into 2011 and subsequent fall off. The US Debt and currency will probably implode over the next several years. Even US government’s pension schemes (along with UK’s too) will ultimately go belly up. Everyone who thinks that the meager payouts of Social Security will be there, I’d say yes they will but with the coming inflationary debacle one’s SS monthly check won’t buy a weeks worth of groceries..

          To try and understand the amount of debt that the US has got do this sum

          Multiply the number of Acres of land in the Lower 48 states then multiply it by $10,000 (per acre) = a big number . Divide that big number by current national debt then you realize we US citizens are absolutely bankrupt..

      • harvey
        Apr 24, 2017 at 4:44 pm

        We don’t, you got that right, which is why there is a great dying happening in the inner cities and rural areas, Trump just picked it up and ride it all the way to Washington. He is here to give them all a proper burial, making their slow death somehow a “great” thing again!

  8. Gershon
    Apr 13, 2017 at 9:21 pm

    In our Obama-Fed-Goldman Sachs “recovery,” college graduates moved directly into low-paying bartender, barista, and server jobs as our manufacturing base has been shipped overseas. Now if this “pillar” of our so-faux “recovery” is crumbling, despite the “Everything is Awesome!” meme of the Fed and its corporate media stenographers, things have gotten dire indeed.

    • James Levy
      Apr 14, 2017 at 7:46 am

      The “recovery” is bogus but those college kids were not going out and getting manufacturing jobs–you are mixing apples and oranges. And the percentage of people in this cadre getting 4 year degrees isn’t up much since the 1980s. What has changed is that the professional-managerial class topped out as a percentage of the population and doesn’t need many new members, but keeps getting infusions of young grads. It is this population of superfluous professionals and managers who are becoming baristas and uber drivers. Deindustrialization hurt another class of people, those with high school of junior college attainment who no longer have union jobs to inherit from their dads. Those people have been crushed.

      • economicminor
        Apr 14, 2017 at 10:15 am

        ” Deindustrialization hurt another class of people, those with high school of junior college attainment who no longer have union jobs to inherit from their dads. Those people have been crushed.”

        And are angry and disenfranchised!

        • John M
          Apr 14, 2017 at 12:12 pm

          Economicminor

          The Angry & Disenfranchised will almost certainly follow a predictable path of the 1790s

          http://tinyurl.com/fiatmoneyoffrance is a free download via Amazon for the book of the Fiat Money inflation of France by Andrew Dickson White. Its only 60 pages long and it has a good ending. The “Elites” got decapitated in the 1790’s

          Its lovely to read history, to know where the future is going..

  9. Marc
    Apr 13, 2017 at 9:40 pm

    Could this decline be due to bad weather?

    • MC
      Apr 14, 2017 at 1:23 am

      I blame Russian hackers.
      What? Everybody’s blaming them for something!

  10. Willy2
    Apr 13, 2017 at 9:48 pm

    – Isn’t there a “Restaurant” or “Eating Out” ETF ?? And if so, what was the price move in the last say 2 to 3 (or 4) years ?

  11. Jarhead John
    Apr 13, 2017 at 10:00 pm

    Local pizza shop has downsized pies by 20% and raised prices ten percent…solution, buy-one-get-one Uno’s from grocery store…national Italian garden restaurant replaces baked potatoe wedges and vegetables with ice cream scoop of mashed potatoes only and raises prices 15% on chicken marsala…solution, marsala bag meal with home embellishments bought at grocery store…national sub chain is now charging $1.00 for substitutions that were “no charge” the last few years…solution, order $6.00 subs from local high school band…I could continue examples of the higher prices, and cheaper quality I have encountered in restaurants here in Pittsburgh…with the same end results…stay out of eateries…

  12. michael w Earussi
    Apr 13, 2017 at 10:44 pm

    It would be interesting to see if there is any correlation between local rent increases and a decrease in restaurant sales.

    Rent has become the single biggest expense for the lower middle class, who frequent the cheaper fast food restaurants, and given that in many cities it’s climbing at 20% or more a year, it’s not too surprising that even as the cheaper restaurants fail the upscale ones (who cater to a wealthier clientele) are doing fine (provided the food is good).

    • Bookdoc
      Apr 13, 2017 at 11:44 pm

      Remember that those rent prices apply to restaurants as well. When a lease expires the landlord raises the rent. Increased fixed cost with lower sales is a recipe for problems. Throw in higher labor costs and you have another closed business.

    • Mike G
      Apr 14, 2017 at 6:02 pm

      the upscale ones (who cater to a wealthier clientele) are doing fine (provided the food is good).

      A lot of eateries are struggling in my heavily-restauranted tourist town, but I went to an upscale seafood place frequented mostly by wealthy locals (an IT vendor giving a presentation was footing the bill) and it was packed at 5pm on a Tuesday. Some people are doing well, but keeping quiet about it.

  13. Michael
    Apr 13, 2017 at 10:56 pm

    I imagine that six months into the new “transportation” tax should make this situation more dire.

  14. ALBERT CHAMPION
    Apr 14, 2017 at 12:05 am

    well, it is my observation that over the last 5 years, the restaurants that i frequented in houston[specifically the woodlands area] have all devolved.

    and i mean that when i lived in the woodlands area, recovering from a fractured pelvis, staying in a brookdale residential facility with 24 hour health care attendants, i ate out every night[because even though my brookdale contract included meals, that dining facility was so lacklustre that i just decided to have dinner out].

    so, i frequented restaurants in the woodlands. i had a sequence. and they were all pretty good.

    but, this year, i had some ambulation setbacks, so i started dining out again.

    my but all those joints i frequented in 2012 have all mostly devolved.

    the most noticeable aspect of the devolution has been the substitution of prime cuts of meat for lower levels. though menued as prime, though priced as prime, they are not. at best choice. in some instances, i would say select.

    even a select level filet is tougher than your shoe.

    those that have refused to devolve i still frequent. i tip well. know all the staff by name. they all know me by name. i have a sort of sequence, so my regular table is always set aside for me unless i telephone to cancel.

    since i am a pretty good cook, i have a feel for ingredient quality. and only with rare exception are the best ingredients being used.

    when i questioned one steak house on menuing its beefsteaks as PRIME, when they clearly were not[no marbling], his defense was that none of his customers wanted to eat any fat.

    ok, i said, then menu the beef steaks as marbling free, choice and or select grades only. oh, he said that he couldn’t do that – no one would pay a prime price for those lower grades. i am sure that was an honest answer.

    so, perhaps there has been a weird flight on the customers’ part to fat free. because they have been led to believe that fat is bad. but now, eating this lean and tough meat has driven them away. i think that they go home thinking if they have to go out to eat a shoe, they might as well boil their own.

    and don’t even get me started on menued jumbo lump crabcakes. there isn’t a bit of jumbo lump in the ingredients. sometimes, i wonder if there is anything other than deviled crab and filler.

    and, then in houston proper, there was this long-term well-regarded restaurant, ouisie’s table. i took an old friend there for lunch. we had the crab cakes. they looked as if they were prepared using cat food. we sent them back and left.

    then, there is brennan’s. for years, one of its specialities was a pecan-crusted, purportedly fresh fish of the day. could be snapper. redfish, gulf trout. i was there for lunch with an old friend some weeks ago. there was no telling what fish we were eating. horrible. it was as if the kitchen had forgotten how to cook. had fired its purveyors of real ingredients.

    yes, the hydrocarbon business in houston has entered into a period of decline. but i have experienced this in other times. but even then, the ingredient quality at the restaurants did not decline as precipitately as i am experiencing it now.

    will the formerly restaurant-going public go home and cook? well, that is an interesting question. try to buy a prime beefsteak these days. most of what you can find will be grass-fed with no marbling. steer wood, i call it.

    try to find a pork chop with any marbling.

    try to find a lamb chop with any marbling.

    i suppose we are being acclimated to the future: soylent green.

    even the bespoke butcher, lobel’s in manhattan, is finding it difficult to find really PRIME beefsteaks. in a conversation with evan, he told me that all of their historical suppliers have adopted the “fat is bad” nonsense.

    everyone seems to have forgotten that “fat is flavor”. and quite honestly, fat will not kill you. the idea that cholesterol is a killer is a bunch of fake science.

    i shall conclude this way. i was in a restaurant that i frequent last night. i decided to try its panko-crusted lemon sole with jumbo lump crab. well, the dish was all panko, no sole. and no jumbo lump crab.

    i complained. it was taken away. i wasn’t charged for it. i went home and had a peanut butter sandwich for dinner.

    i don’t mind paying for real food. but fake food is akin to fake news. not worth the time or the money.

    my 2 cents.

    • Making Changes
      Apr 14, 2017 at 8:10 am

      The small food producer has been almost completely destroyed. It’s all agri-business now. So why are we all surprised that food quality is low?

      This article presents chain restaurant stats…..chains are profit centers; no motive for quality. Look at the recent United Airlines treatment of a customer, astonishingly bad judgement.

      People have choices.

    • TJ Martin
      Apr 14, 2017 at 8:39 am

      Well good sir your ‘ two cents ‘ may of been stated in more detail and depth than mine but we’re in complete agreement on all points right on down to the – ” i don’t mind …. ” – comment

    • Jerry Bear
      May 10, 2017 at 10:17 pm

      I seldom eat out though the quality tends to be better here at local restaurants anyway. I love to buy cheap really tough cuts of beef like bottom round and SLOOOW cook them. They develop a fantastic rich beefy flavor. In the distant past beef was expected to be tough and cooking methods were developed accordingly.
      I like the current trend away from restaurants towards real home cooking, perhaps one good think in the current catastrophe.

  15. unit472
    Apr 14, 2017 at 12:44 am

    Wonder how Subway is doing since it was revealed their ‘Chicken Teriyaki’ sandwich was only 50% chicken with the rest being some ersatz soy substitute. I doubt they are the only restaurant chain using ‘ersatz’ fillers in their ‘meat’.

    A year or two back there was an outcry about ‘pink slime’ being used to pad the beef content of burgers. Some chains vowed they would not use it anymore but I suspect it has made a comeback as franchises have to economize somewhere.

    • WTFrogg
      Apr 14, 2017 at 5:44 pm

      Unit472….speaking of ersatz chicken subs….had one today as a rare treat eating out during the holiday. Foot long + small Mountain Dew + $ 12.00.
      I think I should have bought the 9 lb. pork loin roast @ Walmart for $ 1.47/ lb and made my own home cooked meal. If I slice that roast into nice thick chops I can get 12+ out of that roast = 6 meals for me. On a fixed income that is a no brainer with living cost rising as fast as they are these days.

  16. Jonathan
    Apr 14, 2017 at 3:14 am

    This will sound like loser talk to some, but it seems like more and more people are agreeing with me: Going out is overrated.

    • Frederick
      Apr 14, 2017 at 7:22 am

      No I think it’s winner talk Why would you think cooking great home cooked meals is synonymous with losers

    • Kent
      Apr 14, 2017 at 8:27 am

      Going out is for losers who are too stupid and lazy to cook their own meals of fresh, good food.

      • DH
        Apr 14, 2017 at 8:40 am

        I’d say, like with most things, it’s just about moderation.

  17. Intosh
    Apr 14, 2017 at 4:48 am

    Even some McDonald’s in my area are doing noticeable cost-cutting: no more napkin dispensers. And, not sure if it’s only me but seems everything is getting smaller, even the fries seem thinner.

    • Gershon
      Apr 14, 2017 at 5:11 am

      The people of Wal-Mart certainly aren’t getting any smaller.

    • Frederick
      Apr 14, 2017 at 7:24 am

      The missing napkin dispensers is easy to explain They got tired of people stealing hundreds of napkins to take home or taking ten times more than they actually need and just leaving them strewn all over the joint when they leave I’ve seen that behavior all too often Bunch of gypsies this country is becoming and it’s very sad

      • Intosh
        Apr 14, 2017 at 1:48 pm

        Reducing waste is certainly a good thing but the cynic in me says McD did it purely for penny-pinching purposes. Reducing waste is simply a fortunate side-effect of the policy.

  18. michael Engel
    Apr 14, 2017 at 6:41 am

    When restaurants fail you have longer life.
    When min. wage rise, your copay fall.
    Every body know about fat, bad chemicals, but few know that
    excess protein is dumped in the base of your capillaries, arteries
    & veins. That’s your blood vessel pipeline system.
    When Germany took over Norway, Holland…and confiscated animal
    live stock, strokes & heart attacks plummeted.
    The dumped protein rot, become toxic and covered by our own
    produced “band aid” : PLAQUES.
    If you have one plaque, you are likely to have hundreds. So, stents
    don’t solve your problems.
    Old plaques are more solid than young ones. The young plaques
    can lose their grip and clog , cause heart attack, or stroke.
    The liver capillaries are built more like a grid. When the grid clog
    LDL from getting out of the blood system and it’s build up.
    Clogging of the blood system, the bile ducks with gallstones, will
    create toxemia, will shorten your life.
    Protein : meat, fish, milk, cheese, yogurt, eggs….
    Cut it out.
    Good prime steaks, inferior quality steaks, are all painted red,
    chemical red. The more charred, the less it can be processed.
    No difference between the best steak house in NY & MCD. For your
    body it’s all the same.
    So, save your money, and skip on all those establishments.
    You will have better, longer life.

  19. Meme Imfurst
    Apr 14, 2017 at 7:01 am

    I don’t think you can do to much to food that was processes by Sysco, GFS, Cheney, and the rest or the ‘food’ providers. Few restraints do anything from scratch. That is why everywhere tastes like everywhere else, and the disappointment threshold is lower.

    Since many have mentioned the ‘stock market’, when the bubbles are being blown you feel like celebrating. When they sit static or deflate, you don’t eat out, may be you don’t eat at all.

    • Frederick
      Apr 14, 2017 at 7:26 am

      Did you write “Cheney” Hope there’s no relation because I couldn’t imagine that creep in the food industry

  20. beadblonde
    Apr 14, 2017 at 9:52 am

    I guess I’ll believe it when some suburban chains start closing restaurants. Out in the ‘burbs the fat folk have infinite credit. Fried chicken is white hot. Somehow sales tax collections have fallen off, though. Maybe that’s the retailers. And today I read that the state was once collecting sales tax on Medicaid services (love that free federal money) but the feds finally objected. This entire economy is baloney, just fed money covering up the wounds. Another state came up with a food stamp fraud trick to goose their economy.

    • harvey
      Apr 24, 2017 at 5:28 pm

      Oh yeah everyone i know, including me, are only doing good because either they have a govt job, or a govt contracted job. Out of that you working slave wages for slave pays.

  21. HudsonJr
    Apr 14, 2017 at 11:58 am

    The prices are killer. On a recent business trip, I went to Red Robin for the first time in long time and a burger and raspberry lime-aid ran me $20+tax and tip. Burger was actually really good, but a family of 4 could easily get a $70-$80 bill there for just burgers, fries and a drink.

  22. Kathy
    Apr 14, 2017 at 12:24 pm

    The reason we stopped eating out had to do with deteriorating quality of food and service. Specifically my husband had a horrible case of food poisoning from a once-favorite steak restaurant. We stopped eating out as much after that, and go out about three to four times per year for special occasions only. Since the food poisoning incident, I’ve checked the health code violations of various restaurants in our area and am astonished to see how many don’t practice careful food preparation and cleanliness, that is, many have “contaminated surface” citations and issues with employees not washing hands frequently.

    I live in the east bay of the San Francisco bay area and I can see that hiring cheaper workers and having high turnover seem to be how some have survived. One restaurant I once visited only accepted cash, so it makes me wonder how many are skirting health and tax laws.

  23. Tom
    Apr 14, 2017 at 12:40 pm

    10 years ago, I could buy a footlong sandwich from Subway for $5. Today, that same sandwich costs $10. At $5, I might save $1 by brown-bagging my lunch, and it just wasn’t worth the trouble. Food prices have gone up overall in the meantime, but I can now save more like $4 by brown-bagging it. That adds up.

    The chain restaurants have steadily declined. 10 years ago, I used to eat at Outback Steakhouse fairly frequently – my wife loved their steaks. The last couple of times we went, the meat was tough and badly overcooked. (Our “medium-rare” steaks showed up without a hint of pink in the center. Yes, we can and did send them back, but that means sitting around for an extra twenty minutes while they try again.)

    The salt content of the food at the chain restaurants has gone crazy. Chili’s, Applebee’s, Olive Garden and Panera have all crapified their food or service to the point where it’s just not worth it any more.

    About two weeks ago, I was traveling and decided that I wanted a hamburger for dinner. Not McDonalds or Five Guys, but a REAL hamburger. I made the mistake of going to a Red Robin near my hotel. The service was slow, and slapdash. I ordered my burger cooked medium, what I got was slightly beyond well-done. Since it took almost 45 minutes after I was seated for that to arrive at my table, I decided to eat it anyway. I ended up spending $20 on a Five Guys-grade hamburger, and I’m not planning on making that mistake again.

    Ten years ago, I routinely ate in a restaurant a couple of times a week. Now, between the prices nearly doubling and the increasing crapification, it’s more like a once-a-month splurge, and the list of establishments that I’m willing to visit is a LOT shorter than it used to be.

  24. michael Engel
    Apr 14, 2017 at 3:45 pm

    The Restaurant & Bars index was A very “respectful” sector you
    cannot short in 2008/09.
    The ones that survived popped up like rocket, until last week.
    On Apr. 05 we see a “shoot star” candle on high vol., that’s like
    you expect a missiles attack.
    On the weekly chart, this week is the smallest candle in the last 4
    weeks and the last 20 weeks. Technically, it’s not a good sign.
    The weekly candle that proceed, also a “shoot star” on high vol.
    I

  25. Gershon
    Apr 14, 2017 at 4:34 pm

    Unaffordable rents and mortgages are forcing tapped-out consumers to cut back on discretionary spending. People with little confidence in the future are also unlikely to be out making major purchases.

  26. Sydney
    Apr 14, 2017 at 5:46 pm

    I don’t know anyone, myself included, who goes to chain restaurants anymore. All the great meals out are at independents – locally owned, chef-driven, ethnic or even very high end. The quality is so much higher – whether a $2 taco or $50 steak. Good independents are packed where I live. I certainly don’t see any shortage of dining dollars. Just more discernment over where they get spent.

    • ru82
      Apr 16, 2017 at 10:15 pm

      Could not agree more.

  27. joe
    Apr 14, 2017 at 6:28 pm

    we got several RENTERS caught up with their tax returns

    yepper – 100% in bank

    and now if they fall behind we’ll have to use said rent to file evictions

  28. Willy2
    Apr 14, 2017 at 6:50 pm

    – I also blame the premium hike(s) of Obamacare (in late 2016).

  29. Bobber
    Apr 14, 2017 at 10:14 pm

    I’ve been taking my family to Qdoba or Chipotle every so often. My wife and I split a huge burrito, and my two young kids split a bow. The entire meal is only $16 if you drink the water instead of carbonated sugar water. That’s a pretty good deal to me. People can save a lot of money by just drinking water, plus it’s healthier. Maybe more people are doing that and it’s cutting into the restaurant margins.

    • milking institute
      Apr 14, 2017 at 11:40 pm

      Yes,a bean burrito and water,ah the good life!

  30. TCG
    Apr 14, 2017 at 11:51 pm

    I’ve been working in the same neighborhood for years. 7 or 8 years ago one place had a very good veggie sandwich for $4.50, now it’s $7.50. Their cookies used to be 85 cents, now $1.40. Average sandwiches for a quick lunch were $7 and now they’re closer to $10 most places.

    And of course the govt claim is we’ve had little price inflation over the years since the financial crisis, but food (also grocery prices) have gone up 50% or more in 7 or 8 years as have rents and home prices (even more than 50%).

    No one I know is experiencing this “low inflation” scenario and their salaries certainly haven’t gone up 50% to keep pace for most.

    • Frederick
      Apr 15, 2017 at 2:59 pm

      TCG no they certainly haven’t Inflation adjusted salaries have been getting drubbed since at least 1971 in my opinion What happened in 1971 again? Oh right THAT

    • Jonathan
      Apr 16, 2017 at 4:23 am

      If there is a list of the most blatant lies repeated ad nauseam on this planet, official inflation/CPI numbers would be at least in the top 3.

  31. Apr 16, 2017 at 9:25 am

    I love reading the comments about restaurants including my own. After reading them I have decided that what this country needs is more Mob-owned restaurants. I grew up in Chicago. When my dad took us out to eat – wherever- we always had great meals. Whether we ate Italian, American ala steaks/ chops, Polish, Czech, even Chinese, we always ate well. When I or my friends took our dates out ( and this is after college) any
    restaurant in Chicago was really good.
    Let’s bring back the Mob!

  32. james wordsworth
    Apr 16, 2017 at 3:10 pm

    However the employment in the bar and restaurant sector continues on steady at about +30,000 a month. If and when this rolls over that is the end of the “recovery”. Other than health care most of the employment gains have come from health care and bars and restaurants. Watch that number next month and we will see if this is finally clicking in.

  33. Ole
    Apr 16, 2017 at 10:31 pm

    It would be interesting to look into take away percentage of restaurant sales, is it increasing. With foot traffic down more than sales numbers, it might be the same case, as with me. I opted out for home delivery. Why go to some place, book a table, look for parking place, spend time inside, drive back home, ect… when the same food can be delivered via website or app to home door in 30-45 minutes. The check is same for food, but zero for drinks – there are plenty of those at home. This might explain, why sales are down less that foot traffic, in case if more and more people are opting for home delivery instead of restaurant visits.

    • economicminor
      Apr 17, 2017 at 8:57 am

      Interesting you mentioned take away.. In Portland Oregon there are at least 2 on line delivery services in my daughters neighborhood where you can order from about a dozen restaurants and this service will pick it up and deliver it to your door. You order from the restaurant’s menu but you pay up front using a credit card including the delivery charge which isn’t a whole lot more than you’d pay as a tip. We have used them twice while visiting and taking care of the grand kids. You want Thai food or Mexican or specialty pizza or Italian, no problem.. just go on line and have what you want delivered. No crowds and no driving in the rain or snow.

  34. Apr 25, 2017 at 1:29 pm

    Fools feed on factory food.
    It all comes from the same warehouses, the coke syrup, the Simplot french fries, the packaged meat from the same plants, the bread, the canned goods, the plastic jugs of Fry Max.
    The only thing that’s different are the printed menus, the way they arrange the warehouse commodities on the plates and the prices.
    You get the same GMO ingredients, the same pesticide and weedkiller residues, the antibiotics, high fructose corn syrup, hydrogenated oils and industrial byproducts in every bite at every “different dining experience.”

    I started driving the minutes from the Golden Gate Bridge to the new Good Earth Store in Tamalpais Valley in Marin. 100% high quality organic food there. Skip the middle of the store where the packaged food is, just shop the periphery, the fruit vegetables, nuts, dairy.

    Lost 20 pounds in 6 weeks, never felt better. Only fools rush in to buy factory food.

    • Carl
      Apr 25, 2017 at 1:30 pm

      Dang, forgot to add that I went Paleo…

  35. TheDona
    May 8, 2017 at 1:00 pm

    We can now officially add Ignite Restaurant group (Joe’s Crab Shack and Brick House Tavern) to the dead man walking list looking for buyer or going BK.

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