Reasons Emerge for Worst Chain-Restaurant Slump since 2009

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Six quarters in a row of year-over-year declines.

Foot traffic at chain restaurants fell 3% in June year-over-year. Same-store sales fell 1%, the 16th month in a row of year-over-year declines, completing the sixth quarter in a row of sales declines, the longest downturn since 2009.

Food sales were down, alcohol sales were down. The only thing that was up was prices, but it wasn’t enough to make up for the decline in guest count: the average amount per check rose just 2% in June.

“Brands seem to be reluctant to implement significant price increases given the current environment. Price promotions have been widely utilized, especially by struggling brands and segments to drive traffic,” said Victor Fernandez, Executive Director of Insights and Knowledge for TDn2K, whose Restaurant Industry Snapshot tracks sales at 27,000 restaurant units from 155 brands, generating about $67 billion in annual revenue.

Sales rose in 45 markets and fell in 150 markets. California was the least bad region, with same-store sales up 1.4% and foot traffic down 1.1%. Texas was the “worst region” for the second month in a row, with sales down 2.2% and foot traffic down 4.1%.

How bad is the problem for chain restaurants? So bad that this decline was in fact “good news,” after all the even worse declines in prior quarters. Q2 was the least bad quarter since Q2 2016!

But for the wrong reasons, according to Fernandez: “The reality is that we are also lapping over some weak results in 2016 which make the comparisons much easier for the industry in 2017.”

As always, there are glimmers of hope, but not really, according to Joel Naroff, president of Naroff Economic Advisors and TDn2K economist:

“The summer season should be solid as people have money to spend. Unfortunately, until wage gains improve, which so far continue to be disappointing, no major acceleration in spending at restaurants should be expected.”

The high end – fine dining – was the top performing segment, according to the report, as “affluent restaurant consumers continue to respond positively to those brands that provide a more experience-driven dining occasion.” The upscale casual segment was the second best performer.




Those were the only two segments with same-store sales growth in the quarter. But even those two segments only got that growth due to increases in their average guest checks. So price increases. Even at the high end, same-store guest counts declined.

The weakest segments were fast casual and the bar-and-grill sub-segment within casual dining. Quick service, after having been a top performer in 2015 and 2016, has now booked three quarters in a row of same-store sales declines.

But the overall restaurant and bar business – “food services and drinking places,” as the Commerce Department calls it – isn’t doing that badly.

In 2016, industry sales rose 5.5% to $658 billion. January 2017 was the peak. Sales on a seasonally adjusted basis have been edging down since. In June, sales were $56.0 billion, down 0.6% from January but still up 1.7% year-over-year:

The industry didn’t get crushed during the Great Recession, unlike the car industry which collapsed, with sales plunging by over half. Instead, restaurants went into a relatively mild 30-months downturn: Sales peaked in December 2007 at $38.4 billion, then fell 3% and stayed below the December peak until March 2010. This is a fairly stable industry.

So why are chain restaurants getting hammered when the rest of the industry is not? The report sees growing competition and changing consumer preferences. And each of them eats, so to speak, into the market share of chain restaurants:

The surge of independent restaurants. This is particularly true in cities like San Francisco, Seattle, or New York, but also in many other cities. It includes the entire spectrum, from very high-end to delis that are proud of their sandwiches and other foods.

“Grab-and-go” prepared foods. They’re everywhere.

Red-hot VC-funded meal replacement kits. This includes Blue Apron, one of the most anticipated IPOs this year though it will never make money, and whose shares since going public on Tuesday have plunged 26% below the IPO price.

Convenience stores.

Food trucks. They’re everywhere and nowhere. Sometimes they show up in front of your office. Other times you have to follow them on Twitter to figure out where they are.

Chain restaurants have another problem: many are worn-out concepts. They were cool 30 years ago. And they’re still around, zombie-like, living on borrowed money, trying to keep their prices down by using ever cheaper ingredients and processes. Millennials might never have seen one from the inside. On the other hand, new concepts have sprung up that are thriving and expanding, but the zombies are weighing down the averages. So the averages don’t tell the whole story.

All this is playing out when discretionary spending, which restaurants rely on, is being whittled down by rising costs of living, including soaring costs of healthcare, college, and housing. Many consumers are buckling under the weight of their student loans. And in this environment, mediocre chain restaurants are going to have a hard time.

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  81 comments for “Reasons Emerge for Worst Chain-Restaurant Slump since 2009

  1. alex in san jose
    Jul 14, 2017 at 2:40 am
    • zoomev
      Jul 14, 2017 at 9:04 am

      Seems like a good candidate for as much automation as possible.

      • sheila chambers
        Jul 17, 2017 at 7:27 pm

        Sure, automate like crazy & watch your business fail faster!
        Your employees when off work become your CUSTOMERS!
        Automation has ‘killed’ off millions of your customers & with growing automation, more customers aka “consumers” will be lost.
        Why can’t businesses think beyond the immediate problem?

    • Michael Fiorillo
      Jul 14, 2017 at 3:14 pm

      I’ve had my eye on Blue Apron as a poster child for the absurdities and excesses of the era. Their business model – selling trendy-sounding meal packs to people who don’t cook, with the predictable logistical nightmares – seems transparently ludicrous. That their pre IPO documents explicitly stated that they’ll likely never make a profit is just “icing on the gravy” of this rendition of the madness of crowds.

      • Lee
        Jul 14, 2017 at 5:26 pm

        You should see the ads on TV down here in Oz for these type of meal replacement companies. It seems that between auto ads and those there isn’t much else, but then we don’t watch TV that much.

        Many are targeted toward the people who, let’s put this plainly, are too fat.

        The others target the ‘too busy to cook’ segment.

        There are even ads on the radio for local outfits that prepare and freeze meals. I can’t remember the price of the things, but they seemed too expensive to me.

        Geez, even a medium sized meal at one of the big chains is around A$10 now (McD’s or BK) That medium is really the same as a ‘small’ size in the USA. Too costly for what you are actually buying.

        You can buy a roasted chicken for A$8 from one of the big grocery chains that will give you three or four lunches if you don’t want to cook. (And with our really, really interesting GST system the government puts a 10% tax (included) on the chook (More Aussie lingo for you Wolf). Fresh is GST free……………

        The degustation craze is still going on strong here as well with lots of high priced offerings. There was one that even opened up down the road from us.

        Started out with high, but reasonable prices which moved up after establishing a following. Sometimes good, sometimes not so good, but the last time the better half went out it took 3 hours – yep three hours to get through the meal. So that place is now off the list.

        Some of the ‘better’ places to eat at in Melbourne, are: Vue de Monde, Flower Drum, and Nobu.

        If you ever get to Melbourne and want to dump some big bucks you should try them out. Haven’t been to the first two in years so don’t know how they have changed. Nobu is supposed to have good sushi, at least according to the better half, but I haven’t been there.

        • alex in san jose
          Jul 15, 2017 at 5:33 pm

          Taxation on food is the same in the US. “Hot” or “prepared” food is taxed, fresh or “cold” food isn’t. So that hot chicken is taxed, while that same chicken, if not bought and moved to the cold case, *may* not be. It’s a way to tax the poor more, who are often working 2-3 jobs, don’t have a kitchen, etc.

  2. subunit
    Jul 14, 2017 at 2:49 am

    I’m kind of astonished that resto spending is up almost half again as much as the total during the 2008 recession. Even on a per capita basis that number must be doing relatively impressive growth. I’m surprised that’s even possible given that wages haven’t gone anywhere. For all the complaints of late of no growth in this sector, it hardly seems like a crisis.

    • Meme Imfurst
      Jul 14, 2017 at 6:49 am

      That 16 to 18 dollar entre is now 25 to 27. The 5.00 appetizer is now 9.00. That cocktail 5.5o is now 8.50. That in mind, makes the chart a bit more realistic, not so steep in real billions ‘spent’. Take away those prices increases and it would look different.

      I rarely go out to dine anymore, and that goes for most people I know. Mediocre (from a bag or box) food, so so service, watered down drinks, and a bigger bill does not tempt me to get in the car.

      • TJ Martin
        Jul 14, 2017 at 8:53 am

        Good point . The chart only shows the dollars .. not the seats / tables ( covers in rest. speak ) filled … and having worked my way up the ladder thru the restaurant business in my early years … seats filled was always the main criterion as to how good the day/week/month was . Filled seats always taking priority over end of day receipts as one single ‘ whale ‘ * can boost sales thru the roof despite multiple seats seats unfilled

        So in reality according to their own standards these charts are pretty much ” Much Ado About Nothing ”

        * A whale in restaurant speak is an individual or table that orders a hell of a lot of alcohol … and usually expensive alcohol . And with the profit margins on alcohol sold being excessively high … you can see why one ‘ whale ‘ can skew the numbers

      • Jul 14, 2017 at 9:02 am

        Yes. In my restaurant update a month ago, I added some numbers to this issue:

        “Since January 2010, nominal sales at “food services and drinking places” (then at $37.5 billion) have surged 51%, in part due to price increases: Over the same period, the Consumer Price Index for “Food away from home” has jumped 19%.”

        http://wolfstreet.com/2017/06/12/chain-restaurant-recession-structural/

        As always, inflation in the US is a big part (and sometimes all) of nominal growth. That’s why businesses and the Fed like inflation. Consumers not so much.

        • walter map
          Jul 14, 2017 at 10:08 am

          John Williams is on to them and in his reports adjusts the published statistics accordingly.

          In John Williams we trust. More or less.

      • Dan Romig
        Jul 14, 2017 at 9:18 am

        Indeed. I can go to my local butcher, farmer’s market, grocery store and garden to source high quality food at a reasonable price. Plus, I can buy great beer, bourbon and whisk(e)y at my liquor store for a fraction of the cost to be served the same drinks at a restaurant.

        Most Fridays, a few friends gather at my home for an evening of barbecue, beer and music on my hi-fi. Hands down, this beats meeting at a restaurant.

        On the other hand though, the Twin Cities are blessed with many fine places to go out to eat; as was written up in yesterday’s StarTribune.

        http://www.startribune.com/twin-cities-6-best-new-restaurants-of-the-year-so-far/434089933/

        • Old Farmer
          Jul 14, 2017 at 12:57 pm

          Another advantage to dining at home is that if you’re in the mood to open a second bottle of wine, you can crawl to bed on your hands and knees without having to drive your car.

        • Lee
          Jul 14, 2017 at 5:46 pm

          Dan,

          One of the few things I miss about living in North Dakota is the fish. In particular walleye.

          Nothing better than cooking up a freshly caught walleye caught in the middle of winter after sitting in your ice house on one of those frozen lakes in Minnesota for hours.

          (I knew Minnesota was good for something!!)

      • Petunia
        Jul 14, 2017 at 9:30 am

        Absolutely right. Due to a family emergency we bought take out for 3 people from a smaller chain pizza place, $52 and we had to pick it up. I won’t be doing that again.

        We usually budget for dinner out on birthdays but the last birthday we used the money to buy some nice steaks and stayed home. It just isn’t worth it anymore.

        • Frederick
          Jul 14, 2017 at 11:57 am

          52 dollars to feed three from a pizza joint WOW I’m in the Hamptons and I pay 20 dollars for a veggie pie that would feed four Where are you Palm Beach?

  3. James
    Jul 14, 2017 at 4:41 am

    Planet Fitness gives away free pizza once a month and I take full advantage of it. I will workout and eat a few slices afterwards and then right when they are about to end pizza night they will give away any whole pies . I always get a whole pie on the way out. And I only paid 99 bucks for their one year membership. They never advertise the 99 dollar special. They also have free bagel and gourmet coffee once a month.

    • Mary
      Jul 14, 2017 at 9:39 am

      James–Every time Wolfstreet publishes an article on the economics of eating out, you contribute a comment on free pizza at Planet Fitness. And every time I read your comment, the same (biased, grossly unfair) thought occurs:

      Men will eat anything as long as it’s free.

      • RD Blakeslee
        Jul 14, 2017 at 9:57 am

        Once again: A stereotype insults the exceptions.

        In this case, stereotyping “men”.

        • Jul 14, 2017 at 10:15 am

          Come on, RD, laugh!! It feels good to laugh…

          Mary’s “Men will eat anything as long as it’s free” was hilarious.

          Jokes are funny because there’s a LITTLE truth to them, and this one is at our expense, so it’s even funnier.

        • RD Blakeslee
          Jul 14, 2017 at 10:31 am

          Sorry, Mary (and Wolf).

          *chuckle*

      • Ace Bragg
        Jul 14, 2017 at 11:14 am

        Don’t forget the 5 second rule too. And I play fast and loose with that rule as well :)

      • Frederick
        Jul 14, 2017 at 11:59 am

        I’m not sure I’d even be interested in free food from a gym Probably someone double dipped beforehand

      • cdr
        Jul 14, 2017 at 2:05 pm

        ‘”Men will eat anything as long as it’s free.”

        I have a little pride.

        I will stuff myself only if I think I can get away with it without looking like a pig. Plus it must have deep fried dough, fat, meat or fish, or bulk cheese. Or chocolate samples. Bags of samples of anything are also OK.

      • Justme
        Jul 14, 2017 at 2:43 pm

        >>Men will eat anything as long as it’s free.

        Women won’t eat anything UNLESS it is free.

        • sheila chambers
          Jul 17, 2017 at 7:37 pm

          Whoa there “Justme”, I PAY for my food just like the guys do, I’m suspicious of anything “free”, there is probably a reason why it’s “free” like old, stale, contaminated or out of date.
          Yes, I would look a “gift horse” in the mouth!

      • alex in san jose
        Jul 15, 2017 at 5:37 pm

        Mary – HAHAHA truer words were never spoken. And now I want some of that “meat” from Arby’s.

    • Justme
      Jul 14, 2017 at 2:51 pm

      I was also going to make a joke about the gym called Planet Fatness (or is it Planned Fatness?), which gives away Pizza of all things, but the system somehow posted my blurb before I intended to. Is it a form of customer retention program in case the customers lose too much weight and get in too good of a shape?

      • Magnus
        Jul 14, 2017 at 3:41 pm

        I was wondering if it was just me who thought a gym that give away free pizza was hilarious. The only giveaways at my gym are bananas and wierd sponsored amino acid-drinks.

        A pizza where I live in Sweden is about 8 bucks for a regular one that will feed one, 10-12 bucks for vegan pizza.

  4. Ronnie
    Jul 14, 2017 at 4:45 am

    A glacier moves slowly and but can speed up a tad. Then eventually at the end of the valley big lumps just fall off. So goes the USA economy…car lumps, foodie lumps, oil rig lumps, student loan lumps and the tech lump could go at any moment! Really really quick.
    It’s when the Dollar slides off with a wooosh you realise it’s not the burgers that matter anymore.

    • polecat
      Jul 14, 2017 at 10:58 am

      Not if you have to eat !!
      I assume ‘burgers’ to equate to food in general ..

      Sharpen your gardening and arboriculture skills, folks ! … you’re gonna need them !!

      • Ronnie
        Jul 14, 2017 at 9:57 pm

        Fact : eat Burgers for a month and you are in the Emergancy Dept. As a burger manager was told by medical experts when he was mouthing off on how healthy they are. In was in the media…….? So It could be fake news from either side.
        But you do the test for everyone, eat Burgers for a month and nothing else and see if that “food,” kills you or makes you strong.

        No mention to “food in general ,” was made. Don’t assume. By Burgers I was referring to the snowflake US economy and the 3rd world banking fraud. America you are in real trouble.
        The American Aristocracy should read everything there is to read about the French Revolution. A lot of powerful heads went missing.

  5. Normal
    Jul 14, 2017 at 6:16 am

    Aside from the fact the chain restaurants make lousy food?

    • TJ Martin
      Jul 14, 2017 at 8:42 am

      Lousy hell .. if only that were the worst of it . Try lousy , chemically enhanced , artificial filler infused , unhealthy , blatantly fattening , over salted , over sugared [ that Big Mac you just saw has over four tablespoons of sugar in it ] .. much of it is synthetic … [ the Burger King shake that isn’t … made of highly refined petroleum byproducts , corn starch , artificial flavors and colors … and a whole ton of sugar with nary a touch of dairy to be found ] … not to mention adding insult to injury … engineered … yes engineered intentionally to be highly addictive .

      And people wonder why the American waistline is growing faster than the impending health crisis our ‘growing ‘ obesity is helping to create ? Look no further than chain restaurants and ‘ convenience ‘ food .

      • walter map
        Jul 14, 2017 at 10:02 am

        Technically it is still considered “food”. Technically. That’s because you can eat it and it won’t kill you immediately and may accidentally contain some nutrition. With this definition dirt can also technically be considered food. Technically.

        Refined sugar, as you know, is a slow poison. Obesity, dental caries, heart disease, diabetes were practically unknown in isolated cultures like the Inuit before the introduction of sugar. The sugar industry has laboured intensively for decades obscuring the facts to keep people from knowing this, and have succeeded rather well, judging from the profits.

        Similarly, the petroleum industry laboured for decades to keep the general population from knowing they were being very seriously poisoned from the emissions of leaded gasoline. And still yet again, very few people are aware that many of the chemicals found in nearly all personal hygiene products are quite well-known to be toxic and carcinogenic and are unregulated, and profiteers are going to buy as many politicians as they need to keep it that way.

        Like car salesmen they are always just as friendly as can be, but they are not your friends.

        • Petunia
          Jul 14, 2017 at 1:12 pm

          The elimination of animal testing on cosmetics was detrimental. Over the years, I have purchased makeup that was so irritating I had to immediately throw it out. Most of the high end brands are much better in this regard but the others are up in the air. The very worst products are Brazilian and Chinese.

        • Lee
          Jul 14, 2017 at 5:33 pm

          Ever heard of closing the wallet and doing some exercise?

          Does wonders for things like fitness and fatness.

          What ever happened to personal responsibility?

        • walter map
          Jul 15, 2017 at 6:08 am

          “What ever happened to personal responsibility?”

          Translation: “What we do to you, it will always be your fault.”

    • Jeff
      Jul 16, 2017 at 7:57 pm

      I must confess that Carl’s Jr. California Classic Double Cheese Burger is one of my favorite lunches. No soda or fries, just the $2.49 burger. It actually has some vegetables, protein and while tastes good and makes a light lunch all by itself. I can’t make anything at home for that price.

  6. Trmist
    Jul 14, 2017 at 7:55 am

    Eating out at chains restaurant is one of worst thing you can do for yourself. They charge 4-6 times more than for what you could make it for home. The food itself is loaded with with dangerous levels of sugar, salt and fat. And the kicker is most of their food is not very tasty. Learn how to cook, it will add years of high quality living to your life.

    • Paulo
      Jul 14, 2017 at 11:06 am

      We will be leaving in 20 minutes to visit a hospital patient, (Father-in-Law). On the way home, to make a serious event palatable, (excuse the pun), I will be stopping at my favourite cash restaurant to pick up some curried soup (full of fresh vegetables and seafood), and some chow mein (also full of fresh sprouts and vegetables). We will then stop at a local park on the Campbell River spit and have a nice picnic where we will be able to watch the marine traffic and float planes along with the estuary. Cost? $20 cdn for both meals…in total. The dog will be able to run and sniff while we eat.

      Number of chain restaurants we will skip and pass on by? Six? I don’t even know and don’t care. This will be a wonderful picnic at 35-40% of the cost of going to a chain.

      regards

    • Michael Fiorillo
      Jul 14, 2017 at 3:29 pm

      Wait, aren’t sugar, salt and fat the three major food groups?

      • ft
        Jul 14, 2017 at 3:57 pm

        Actually there’s a fourth food group……Tums

      • California Bob
        Jul 16, 2017 at 12:40 am

        Your forgot alcohol and caffeine.

        Have an Irish Coffee and get a balanced meal.

  7. prepalaw
    Jul 14, 2017 at 8:06 am

    Why is every restaurant employee instructed to bark at the customer after plating the food: “How is your great restaurant experience going today” or something similar.

    It is very grating and I seldom return to such places.

    • Mike G
      Jul 14, 2017 at 2:14 pm

      Another annoying thing about chain restaurants (and other big corporate service operations like Disney) — a lot of the scripts the poor employees have to recite are really artificial, grating and insulting to the customer’s intelligence. Waitstaff who sound like a radio commercial you can’t turn off, relentlessly pushing more product on you. Scripts no doubt constructed by head office MBAs who never see a customer.

  8. Ron
    Jul 14, 2017 at 9:44 am

    Few weeks ago the wife and I dined at Chez Panisse the bill was over $300, the French Laundry in Napa was $500 back in 2009 so it must be close $800 today. Fine dining at the top end is mega bucks and enjoyed only by a very small slice of Americans. Living in the Bay Area we have unlimited chances to dine at a variety of interesting locations but only do so for special occasions.

    • Pavel
      Jul 14, 2017 at 12:14 pm

      A friend of mine went to the French Laundry perhaps 5 years ago to celebrate another’s birthday. Four people total and the bill was at least $2000, probably closer to $3000. My friend was astonished.

      I think the most expensive meal I ever had was with the same friend in Brussels, again 5 years ago or so. It was in an amazing small restaurant, almost like a private club. I guess it was $600 for the two of us (I paid :).

      Those days are long gone for me, and I try to shop at farmer’s markets and cook at home with organic ingredients and the best liquor and wine.

      Real world data department: I am in London this week, and dined at a trendy and very good restaurant in one of the funkier parts of town (i.e. not Mayfair or Chelsea). Two cocktails and a (delicious) dinner salad: £45, i.e. about $60.

      I don’t begrudge them the price: the drinks and salad were great and the service excellent (and very cute in several cases :). But for me this is now the exception. £15 for a gin martini! I look forward to getting back to my small market and making my own salads.

      • Mike G
        Jul 14, 2017 at 2:20 pm

        When I was in Copenhagen a couple years ago I walked by Noma, considered the best restaurant in the world by critics. It costs about $300 a head, plus $200 for wine pairings. Every seat was packed on a cold, rainy Saturday at noon.

      • Cynic
        Jul 15, 2017 at 4:32 am

        A wealthy friend who dines out a lot in London, not at chains of course, assures me that portions are growing steadily and obviously smaller, even when quality seems stable.

        I often suggest a place that was good before, to hear ‘No, not now, it’s turned into a rip-off.’

  9. Bobber
    Jul 14, 2017 at 9:48 am

    The restaurant prices are getting out of control, but you can take the edge off by simply not ordering the “drinks”, which amount to carbonated sugar water. In any case, my mother taught me people shouldn’t eat and drink at the same time because it impedes digestion. I’ve trying that approach over the past year and it works very well. My stomach used to gurgle a lot, but not any more. Drinking liquids in between meals, rather than during meals, has really helped me.

  10. RD Blakeslee
    Jul 14, 2017 at 10:00 am

    None of the above available in, for example, sub-sahara Africa.

    Lucky them.

  11. Anon
    Jul 14, 2017 at 10:00 am

    My latest Pacific Gas & Electric utility bill shows an increase in the cost per kwh of over 10% and an increase in the cost per therm of gas of about 20%. It is expensive being a foot soldier in the war against global warming if you live in California. For customers living on the financial edge, an increase in one area tends to promote a cutback in another area.

    • Anon
      Jul 14, 2017 at 10:53 am

      increase since last year …

    • Justme
      Jul 14, 2017 at 2:54 pm

      PG&E has to increase energy rates because we are using less, it is just simple math. Yes, sarc but it actually is how they operate!

    • alex in san jose
      Jul 15, 2017 at 5:44 pm

      I’m paying PG&E at commercial rates so yeah, juice is expensive. The guys in the back half of the building just use it as a glorified storage space and occasional place to hide out from the wife or bang the girlfriend, so I pay 2/3 to 3/4 of the electric bill. So as an individual with some fluorescent lights, a half-sized “college student” type fridge/freezer, a radio and a computer, I’m paying $30 – $70 a month depending on the month – during the colder months I dress warm and run a tiny heater.

  12. R. Seckler
    Jul 14, 2017 at 10:59 am

    The math is simple. Wages haven’t gone up. But food prices, healthcare, the phone in your pocket, housing, auto / home insurance, and energy (have I left out anything?) have. Subtract B from A and you find shrinking disposable income. What’s the first thing you can cut out?

  13. Mickey
    Jul 14, 2017 at 11:35 am

    through this period of declining traffic, the BLS reported 50,000 restaurant job growth the ast 2 month.

  14. Frederick
    Jul 14, 2017 at 12:02 pm

    Here in Marmaris Turkey my wife and I just found a great place where the owner is religious and serves thousands of great meals a day just above cost I get a beautiful kebab with lamb and vegetables for around a dollar and a soft drink is 50 cents The only problem is the wait time and parking

    • Petunia
      Jul 14, 2017 at 5:05 pm

      I watched a Turkish soap drama on Netflix and everybody was always eating. The food looks amazing, lots of salads and fruits, beautiful country too.

    • Lee
      Jul 15, 2017 at 12:14 am

      Too bad that the country has taken a wrong turn and is headed for the dumps with your current head of state.

      The next dictator in the making.

      Do you have an escape plan when the State comes for you?

  15. mean chicken
    Jul 14, 2017 at 1:01 pm

    Considering business is booming, they certainly should be able to shoulder a higher minimum wage. Oh, if it weren’t for the collapse of the shopping mall to automated online shopping!

  16. Karl Kolchak
    Jul 14, 2017 at 1:32 pm

    I have zero proof to back this up, but I suspect from experience that the mass chain restaurants have been using ever cheaper ingredients in a desperate effort to keep prices from going up. I rarely eat at such establishments anymore, but when I do I always end up thinking that the food is far worse than I remember it being years ago.

    • Petunia
      Jul 14, 2017 at 5:10 pm

      You are not imagining it. It is getting worse and the portions are smaller too. There are only a few chains now that are really good, my favorite is Chipotle.

      • Ethan in NoVA
        Jul 15, 2017 at 11:55 am

        Chipotle here is kind of pricey, at least with the chip up-sell and stuff. I think I like Moe’s better, at least on the discount Monday.

  17. GSH
    Jul 14, 2017 at 1:39 pm

    Restaurants will be in trouble here in OR come 2019. They just passed a law to make harvesting roadkill legal by then. Of course, you’ll still need a permit. You can’t make this stuff up….

    • RD Blakeslee
      Jul 14, 2017 at 2:51 pm

      Maybe it will cut restaurant costs.

      Restaurants could harvest it, doctor it to taste good and serve it as Natural Steak.

    • Petunia
      Jul 14, 2017 at 5:13 pm

      We are descending into third world status. First slowly now rapidly.

  18. tampared
    Jul 14, 2017 at 2:01 pm

    Wolf,
    Can you comment on how individual chains will do in the future?
    I’m here in Tampa and where Outback is headquartered and was wondering how you think they and their assorted brands will do going forward.

    • Jul 14, 2017 at 4:34 pm

      I’m not the right person to comment on individual chains. Outback, however, is one of the older ones… I used to enjoy it 20 or so years ago. Back then, it was hard to get in. Last time I went was on Saturday night about four years ago (after a long and brutal hike, when we were depleted, it was already late, and we needed something big and protein-y to eat, and this was next to the highway on the way back, so we stopped and ate). I won’t do it again unless it’s an emergency.

      I think their quality has gone to hell. We were not the only ones to think that: Saturday night, this place had lots of empty tables. We ate at the bar, which was also mostly empty!

      As far as I’m concerned, I would put Outback into the zombie category. Just my personal opinion. I have no hard data on this…

      • Sporkfed
        Jul 14, 2017 at 7:54 pm

        This was the beginning of the end for Outback.
        https://secure.marketwatch.com/story/outback-steakhouses-parent-agrees-to-32-billion-buyout

        I believe once the cost cutting was finished the carcass was then taken public again.

        • Jul 14, 2017 at 9:05 pm

          You’re probably right.

      • California Bob
        Jul 16, 2017 at 12:51 am

        A friend and I had Porterhouse steaks at the Outback in Chico, CA, USA a couple weeks ago. Porterhouse steaks are our favorites, but you don’t find them on many menus. The steaks were excellent–but hardy cheap–and the side dishes and service were good. But, the place was almost deserted and it was a Saturday evening.

  19. Jon
    Jul 14, 2017 at 4:42 pm

    USA economy is driven by consumer spending yet no sign of stock market or real estate prices going down…
    wondering how big is his disconnect and how long would it go on…

    per stock market and real estate everything is rosy…all time high..

  20. Jack
    Jul 15, 2017 at 4:56 am

    I wrote here once before about my most recent ( year ago) visit to Outback. Like you, I was hungry for something that I could “bite” into. Outback was nearby. Ordered a ribeye. Was brought a piece of meat that was at best a butt steak. No marbling, no juice, no taste. I told the waiter this was not a ribeye. Manager came out and swore it was a ribeye. I asked him to define a ribeye. He couldn’t. I said here is a good lesson for you. This is not a ribeye. I got up and left.
    Obviously I am not the only person who has had this experience.

    • mushroom
      Jul 19, 2017 at 12:20 pm

      Ribeye s at Cracker Barrel are consistently large and very good.

      Reasonable cost too.

      You all can park your Mercedes in the back too.

  21. GW
    Jul 15, 2017 at 7:54 am

    Chris Hamilton on https://econimica.blogspot.com/ has written a lot on the impact demographic changes especially how the growth of economically active age segment is now stalling. That may well be a contributing factor – baby boomer retiring, watching more their wallets and waistlines.

    The summer numbers will be interesting as they may show tourism related declines.

  22. Kevin Beck
    Jul 15, 2017 at 12:40 pm

    Another reason: People cooking their own meals, without the “help” of Blue Apron and their ilk.

    I prefer to just go to my local farmer’s market and purchase a week’s worth of food every Saturday morning, then do my own meal preparation at home. I have no desire to resort to Blue Apron and others like it; I have access to enough variety at my farmer’s market or mega-grocery store.

    • alex in san jose
      Jul 15, 2017 at 5:52 pm

      Hot damn yes. I make about $12k a year. Since I have to hand about 20% of my gross over to the IRS, I live cheaply, ride a bike, am very thrifty and systematic about things (5.11 makes good shorts for $50 that will outlast 5 pairs of $19.95 shorts) and since I’m not one to let any diet fad pass me by, I’m trying the “keto” diet. This means very selective eating, and thus restaurant meals are pretty much out. I’ll eat at a restaurant if my boss takes me, for instance (and he pays lol), but I’m pretty much selecting and cooking my own foods. Whole Foods is good for nuts and seeds, Sprouts for most everything else, ethnic markets, etc. And I cook using 1 small frying pan, 1 small sauce pan, a cheapo hot plate, and a few utensils. It’s great! Even though the “keto” diet calls for lots of meat and fish and eggs and cheese and stuff, as well as lots of green veggies and nuts, it appears to be turning out to be cheaper than the “SAD” (standard American diet).

      So I’m right out of restaurants, even though there are some pretty good ones around me.

  23. Rob
    Jul 15, 2017 at 4:03 pm

    Could it be Millennials arent so impressed by Cheesecake factory or similarly produced disgusting crap that the obese older generations were tantalized by?

  24. Ambrose Bierce
    Jul 16, 2017 at 10:52 am

    Targeted minimum wage laws puts pressure on these businesses bottom lines. There is also a secular downtrend in immigration. These franchises have gradually evolved into frozen food lockers, you can buy the same products at your super. (PF Changs?) Non franchise businesses then buy and cook local products and gain an edge. Chipotle Grill is an effort to confuse you about which is which.

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