Households at lower 80% of income scale are maxed out.
“July proved to be a tough month for chain restaurants,” the report said.
Foot traffic at chain restaurants fell 4.7% in July year-over-year. Same-store sales fell 2.8%, the 17th month in a row of year-over-year declines, the longest downturn since 2009.
On a two-year basis, same-store sales fell 4.2% from July 2015, and traffic fell 8.7%.
Sales rose in only 12 markets and fell in 183 markets. California was once again the least bad region, with same-store sales down 0.7% and foot traffic down 3.6%. In other words, no region had positive results. The Midwest was the “worst region” with sales down 3.6% and foot traffic down 5.2%.
“While the economy keeps growing at a moderate pace and job gains remain strong, the consumer seems to be on vacation – literally and figuratively,” said the report by TDn2K whose Restaurant Industry Snapshot tracks sales at 27,000 restaurant units from 155 brands, generating $67 billion in annual revenue. That’s about 10% of total “eating and drinking places” revenues as tracked by the Commerce Department. The report added:
“One of the clearest indicators that households are spending cautiously is the softening of big-ticket purchases. In July, for the eleventh month out of the last twelve, vehicle sales were below the rate posted the year before. Home sales, while still trending up, are now expanding at a decelerating pace.”
Food sales were down, and alcohol sales were down. Prices were up — the average amount per check rose 1.8% in July – but it wasn’t enough to make up for the decline in customer count. The report blamed consumers that were maxed out:
“[H]ouseholds are currently maintaining their lifestyles by reducing their savings rate, and that is likely restraining spending on discretionary goods. We may have to wait until the fall or early winter, assuming wage gains accelerate by then, to see any pick up in restaurant sales.”
So everyone is waiting for wage increases for the lower 80% of the wage earners that will finally outgrow inflation. That’s all it would take to crank up the economy, and even the restaurant business. People have been waiting for years for these real wage increases. But it’s just not happening.
The report pointed out that those at the higher end of the income scale, those that can afford high-end chain restaurants, were pulling their weight in the fine dining segment:
Fine dining and upscale casual continue to outperform other industry segments. Fine dining was the only segment up in July (0.4%) and upscale casual was down fractionally. The slowdown in fast casual sales noted in the past continued in July, as did softness for quick service.
Chain restaurants are getting hit by a combination of factors, including:
- The surge of independent restaurants, from high-end to delis.
- “Grab-and-go” prepared foods available at every grocery store.
- VC-funded meal replacement kits, such as Blue Apron, one of the most anticipated IPOs this year that has now totally crashed.
- Convenience stores.
- Food trucks.
This data is based on restaurant chains, representing about 10% of total restaurant and drinking places sales. But the numbers are starting to show up in the overall sector of “food services and drinking places,” as the Commerce Department calls it. This includes taco trucks and the like.
Sales in June, at $56.0 billion adjusted for seasonal variations but not inflation, were flat with November 2016, a period of 8 months without growth. They were down 0.6% from January but still up 1.7% year-over-year. In the chart, note the two-year period without growth during the Great Recession – and how sales have surged 49% since:
But once inflation is taken into account, the difficulty of the overall sector becomes clearer. I adjusted the sales at “food services and drinking places” (by the Commerce Department) for price changes as reflected in the Consumer Price Index for “food away from home” (by the Bureau of Labor Statistics). And suddenly the dreariness of the sector moves into the foreground.
During the Great Recession, total sales adjusted for inflation (in today’s dollars) fell about 7% from November 2007 through December 2009. Since then, sales have grown merely 22% (as opposed to 49% not adjusted for inflation).
In June 2017, sales were back where they’d been in December 2015 – that’s 19 months of now growth, with the past six months in decline:
As the TDn2K report pointed out, households are having trouble maintaining their lifestyles, and those that have savings dip into them. But over half of US households don’t have savings to dip into.
So credit card debt, at $1.02 trillion, has hit an all-time high. Auto loan balances, at $1.13 trillion, have far surpassed any prior all-time high. Housing costs are eating up an ever larger share of incomes. Healthcare costs are soaring. Households with kids in college are paying a big price. Many millennials, even those with good jobs, are buckling under their student loans, which have skyrocketed 164% over the past ten years to $1.45 trillion. And inflation-adjusted discretionary spending such as for restaurants by people at the lower 80% of the income scale is taking a hit. Something has to give. It’s the description of a messed-up economy.
Are we blinded yet by the brilliance of corporate earnings? Read… Stock Market Warning Siren is Blaring
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Maybe this should be celebrated. The less people eat outside the more likely that they will eat at home. Of course they may still got microwaveable packaged food that is still unhealthy.
But the odds increase that they will eat healthy because they will carry lunch or dinner or whatever in a brown bag.
So the health of Americans may actually improve a bit. Which means that the health care expenses may go down a bit
Of course now you have to do the balancing of the equation where the lowering of fast food expenses or restaurant expenses in general may lead to a consequent lowering of health care expenses. This may lead to sudden drop in employment and economic output in those sectors which needs to be balanced by more money in the pocket of Americans to spend elsewhere as well as better health for them.
So I would say this isn’t really a bad thing.
The problem is the cause. Americans are seeing how their incomes are being sucked away by the rentier sector. Wages remain stagnated and job insecurity is increasing, 0 savings, debt… it’s not that they decided to have a healthier life style…
By the way, this sense of insecurity is causing serious health problems, enough to offset any possible benefit from eatingat home.
True Look at the opioid crisis and SSRI use as an example The population is NOT happy for some reason obviously
They not only stop going to restaurants when they realize the rentier class is sucking them dry; they also start reading their Marx.
Maybe they should be reading Henry George…
In my best Jim Gaffigan voice: “hot poc•kets” …. “de•pression poc•kets!”
I’m not so sure……
“So the health of Americans may actually improve a bit. Which means that the health care expenses may go down a bit”
Sad to say, the reverse is true. In health care when revenue falls, prices are usually raised to cover the shortfall. Look at cities where there are several large hospitals. The competition should drive prices down. But instead, they add high priced services to compete on “quality”. And of course, prices rise.
Cleveland Clinic Lost Operating Income In 2016
The hospital system’s operating income dropped to $243 million, down from $481 million in 2015.
link >> https://patch.com/ohio/cleveland/cleveland-clinic-lost-operating-income-2016
Here’s a food story: I stopped at a cafe/bakery in Moab, UT, called Made from Scratch, fresh baked goods. Bought two large plastic wrapped cookies for the road, $7. The bakery cases were full of dipped macaroons, all kinds of pastries and cookies. Huge variety. A few people sitting at tables. When I opened the cookies to eat, they were almost tasteless. No butter, no sugar, no crumbs…..made at Sam’s Club or Costco to be sold commercially. I realized that the bakery couldn’t afford to bake their own food. They are definitely not going to stay in business. I threw the cookies out the window. Not worth eating. Won’t make that mistake again. That’s what’s happened to America.
Big, tasteless products that are full of GMO canola oil, fake sugar and cheap flour. If GMO was so great they would be marketing it with pride instead of killing off the competition.
Brilliant work, Wolf Street once again doing the job of the failed msm.
But interestingly every month jobs are added in bars and restaurants and last month of about 200,000 jobs added, 50,000 were in bars and restaurants. Something does not add up
My parents were immigrants from Germany and while growing up in the 70’s, I don’t recall ever eating out.
Eating out only really started in the 80’s.
Growing up in the 60s we went out to eat quite often for the time Maybe once a week mainly for ethnic foods we couldn’t make ourselves but my father had an above average income My girlfriends family went out for steak and he was vice squad detective for Nassau County NY police
My family was middle class/almost upper middle class but in the 70s when I was in my teens we would go out maybe twice a month.
No wonder that family budgets are stretched… we had a single landline (obviously!) phone at probably $30/month. Now people all have smartphones (at $500-1000 every two years in some cases), pay monthly cellphone bills of $50-100, and eat out two or three or more times per week — often paying it all on credit cards.
Crazy times. And unsustainable ones.
Not me that’s for sure No phone at all and don’t want one My wife has a ten year old Siemens phone that still works great and we get minutes for around 7 dollars a month 500 minutes I believe Works for us As far as eating out maybe once a week if that But the two of us live pretty well on 30 percent of my limited income and invest the rest
Piece into today’s Globe and Mail (from US) estimating that last year smart phones and service took well over 300 billion out of the US economy.
But part of the blame is the consumer, who feels naked without his phone. I’ve finally got PO’d on a couple of dates and asked gal to leave phone behind.
BTW; the high school here allows phones in class- ludicrous.
I have flip phone (60$) and a 40 $ a month service, and I’m tempted to go back to the land line I’m paying $10 a month for but have never used.
I need a cell two or three times a month, when out of town.
The rest of the time it might as well be a land line, I don’t carry it with me. (Bro just got $350 fine for ‘distracted driving’ he wasn’t even talking, just wanted to see who it was. My suggested defense: you were checking time)
As for aps, (wow! if I hold phone to music it displays lyrics!!) the one that I do envy is the map ap. I can get lost anywhere and a few times I’ve asked jogger for directions and they check map- handy)
But 300 billion is lot to pull out of economy.
Robert – I literally only remember eating at McDonald’s growing up, once. Once.
That being said, I got a whopping $25 scholarship to go to a summer art program when I was in high school (it took a great deal of effort to get it; white people were not supposed to do art, we were supposed to do the work too dirty, dangerous, or demeaning for others to do) and I was given money to buy a Whopper from a Burger King on the way from the bus stop to the art academy each day. After an almost 2-hour bus ride, and generally no breakfast, that Whopper was life. And later, when we were even poorer if that could be imagined, a hole-in-the-wall burger place up the street had a lady who felt sorry for us (for us! Imagine that! Whites were to be hated, not to be sympathized with) and sold us burgers made with nearly-spoiled beef she’d probably have to throw away at the end of the day, for whatever we could pay.
When there’s no food at home ….
Delete my reply above please Wolf. Haven’t walked in the guy’s shoes. Didn’t see a Black or Hispanic until I was over 30.
I love the global food truck movement. I’ll take ethnic, organic, handmade products from a food truck any day over a corporate defrosted meal infused with high fructose corn syrup and salt.
That’s what I think is happening as well. Food trucks are doing to fast (junk) food restaurants what Amazon is doing to department stores. I live in Portland, OR and food trucks are everywhere, and for the most part their food is very good, much better than fast food crap.
Quality is (again) winning over quantity.
Wife and I would rather eat home with fresh cooked meal and local Veggies from our local farm in season. Much cheaper and better than over priced food at one of the Dining establishments we go to. Besides, nobody can cook a steak like my wife can. NOBODY!. I would rather buy local and help support the farm of one of my wife’s co workers Parents than a big box grocer. The food is the best I have ever tasted and is just coming in off the fields most of the time when we pull up. It does not get any fresher than this Wolf
Yes, fresher if you grow it at home!!
Looking forward to spring planting time and then watching the plants grow. I’m tired of the crappy weather we have had over the past year or so. I hope that we have a ‘normal’ spring and summer here this year in Melbourne.
I can hardly wait to start harvesting fresh fruit and vegetables again.
Later this month we are NOT going out for the usual birthday meal even though the place we’d go to wouldn’t be that expensive.
I’d rather eat a home cooked meal and relax while eating.
August is a fantastic time for shopping at farmers markets in the Twin Cities!
Iv’e got onions growing this year, that would rival any of the Egypt of old … they’re huuuuuge ! … and they’re truly organic, straight down to mr. polecat’s specially blended, 1 year worm-turned, chicken- $h!t/kitchen scrap fertilizer !! Same with berries & cherries picked in July.
Also just jarred 28 pints of backyard honey !
Just pointing out that ditching the almighty urban/suburban Lawn for food plants, flowering insect beneficials, and those insects as well as birdlife (wild AND domestic), make for an overall positive seasonal gain with this suburban household …
But it does take some effort …
I agree that farmers’ markets are better than big-box stores. Plus, the big-box stores and other markets (e.g. Trader Joe’s) use an obscene amount of plastic. Our planet is drowning in plastic!
Glad to see I’m not the only one driven nuts over all the plastic wrapped vegetables (Trader Joe’s is one of the worst).
5 months ago my wife decided we were going to an upsacle, not top drawer,restaurant. I could not find much to order so I ordered a 1/2 chicken, which came with 2 small pieces of brocolli.
19.95. Plus tax and gratuity.
When it came I looked and wondered how they could sell something so small.
I can buy a whole organic fryer for 7 bucks and do it myself on bbq, add potato and veggie and iced tea for 2 of us for ~$10 bucks.
I think we discussed this type issue here before. Nothing has changed except the consumer has less and less to spend.
Retail and restaurants are dying because people have NO MONEY. In the last eight years – higher taxes, obamacare fees, the destruction of American manufacturing, outsourcing of jobs, H1B visas, unlimited immigration, insane housing prices and rents due to ZIRP/cheap and easy money, the crushing impact of democrat regulations – just where do these folks think the money is coming from?
Bill Gates and Jeff Bezos don’t shop at JCPenny or eat at Applebees
Like all of that started in the last 8 years. This isn’t about which party is in office (your argument is completely destroyed if you consider that Democrats dominated both houses during the most prosperous era of our nation’s history). This is about capitalism. This is the end game. Where big business owns the Government of we the people. The offshoring of our manufacturing base started at least 35 years ago and the deregulation of the banks (the root of financial rot) has been a work in progress since they passed Glass Steagall. If you really want to pinpoint the moment that collapse was inevitable in this country look to the invasion of Iraq in 2003. That started the greatest transfer of wealth from the taxpayer to the war profiteers and destroyed our standing in the world of nations. If you supported that war then you have no business complaining.
I’m doing my part. The closest thing I do to “eating out” these days is either the fresh ahi poke I got at Safeway today and ate sitting at the light rail station (downtown San Jose is made to be as unfriendly as possible so there are no seats or benches etc., you’re supposed to buy shit and get the hell out) or the generally once a week small meal from the buffet in Whole Foods.
I’m following a diet, called low-carb or keto or a number of things, basically you try to keep carbohydrates very low, like less than 20 grams a day. But that’s not hard enough so additionally, I’m keeping it what would be called Kosher style. (Keeping true Kosher requires having a ton of money and living in only certain parts of the US, or moving to Israel.) That 2nd requirement seems to help a ton in keeping the diet on the right track as far as healthy, “whole” foods. I can’t just go into a burger place and get a bacon and cheese slathered whatever and just not eat the bun. So I’m buying my food and cooking it at home.
What’s interesting is, this diet seems to actually be cheaper than how I was eating before. I don’t get hungry the way I used to either. 2 months in and I’m down 15 lbs, 2 inches in waist size and feel great.
But I’m no longer going to Togo’s, City Fish, Red Rose Halal Cafe, Pho Tau Bay, Ozu, or any of the places I used to go to, these days.
And, places here are closing. I never thought I’d see it but Pita Pit’s closed. https://www.yelp.com/biz/pita-pit-san-jose-3
Pita pit Ohhh No the humanity
You should go to Jack’s on 4th and Taylor and order a cheesesteak with onions and peppers. Now thats whats for lunch!
Personally, I’m somewhat against eating out for a couple of reasons:
1. Waste of money
2. You have no idea what they’ve put in the stuff that was served, so not good for your health.
But economically speaking, there are two reasons for eating out:
1. It takes time and effort to prepare your own food, shop, etc, so, it depends on whether you think time is more important than money. Fundamentally, an economic calculation, how much money is your time worth?
2. Not so important in an immediate sense, but eating out means you’re helping to economy to keep going. This does by the way benefit you in the long run if those greedy companies weren’t blowing all the money they make on share buybacks and other financial chicanery. Cause those guys working in restaurants, if they get paid, well, that’s better for the economy than if they are unemployed.
But I’m going to bet that for a majority of us, we can’t really afford to eat out all that much. It just doesn’t make enough economic sense directly.
“But I’m no longer going to Togo’s”
During my undergraduate years at SJSC, I lived at 7th and San Salvador, typical impoverished student…rarely had 50 cents in my pocket. However, occasionally a friend and I would go to Togo’s… a real treat. It was located in a small, wooden garage across the street from the Spartan Market. I remember a hand lettered sign, on poster board, next to the menu on the wall… this goldmine is for sale…I kid you not….
“So everyone is waiting for wage increases for the lower 80% of the wage earners that will finally outgrow inflation.”
Classic chicken and egg problem. Business owners wish that their customers had more money to spend. And they know that to get there, they also need to raise wages for their own employees.
But if they raise their’s and nobody else does, they’ve just reduced their own income and competitiveness. So the only thing you can do is wait for everyone else to raise wages, start seeing the extra income, and then raise your employee’s wages. Unfortunately, everyone is doing the same thing.
But what about the super low unemployment rate? Doesn’t really matter. If I have 40 employees making $12.00/hour and the next employee will cost $15.00/hour to get him in the door, I now have to raise all 40 employees to at least $15.00/hour. So do I take a major haircut to get that next employee in the door, or do I just choose to not expand until the next recession? Depends on how good business is. And it isn’t good because no one is raising wages.
Tragedy of the commons.
“Raising wages” in an effort to get more customers sounds like a never-ending circular chase-your-tail economy.
The REAL problem is restaurant overcapacity: cheap-money induced capital misallocation.
What IS needed is government and central bank financial responsibility…
“Raising wages” in an effort to get more customers sounds like a never-ending circular chase-your-tail economy.”
It works as long as you can grow productivity.
“The REAL problem is restaurant overcapacity: cheap-money induced capital misallocation.”
Doesn’t reducing capacity = even fewer jobs?
But this isn’t socialism. The object of opening businesses is not to provide jobs, but to make a profit.
Expanding the money supply is getting us all in one hell of a mess.
But the purpose of an economy is to provide jobs. And if businesses aren’t going to do it, the people will demand that the government do it. Then you get real socialism.
RE: Doesn’t reducing capacity = even fewer jobs?
So does increased productivity, albeit with POSSIBLY higher wages.
Given the claimed increases in productivity over the last 40 years, wages should be at least 30% higher with the rest of the productivity gains as company profit, but wages have in fact been flat when adjusted for inflation and falling when benefit loss [e. g. defined benefit pension plans and stable employment] are considered in addition to inflation.
The effect on [un]employment is another question.
The true unemployment rate is nothing close to the official rate if you include the 94 million that aren’t included Who either don’t want to work or have simply given up like myself
John Williams estimates the true U6 number to be over 20 percent
I don’t disagree. I have a close friend who was laid off years ago from a NASA related contractor. He has decades of specialized training around rocket engineering.
That education doesn’t mix well with the rest of the economy. He has saved up enough, and his wife has a high paying job, so he doesn’t actually have to work.
He’d love to, but he’s not going to work for $12/hour. And he is not applying for anything unless it is worth his time and effort.
This. I live in the so-called “Silicon Valley” and very highly trained people are being offered $12 an hour. New CS majors with the ink barely dry on their degree are being offered minimum wage. Very skilled electronics techs, people with my skillset, able to read a schematic, diagnose and repair to the component level, know a good deal about soldering, basic electronics and mechanics, able to look at a picture of a a prototype and the schematic can make it and put in your desk in a day or two, are lucky to have any employment at all. Minimum wage, or barely above it.
The low end earners wouldn’t need $15/hr if their rent hadn’t doubled over the last 5 years while their salary was stagnant.
The new self service in restaurants is a big strike out with me. We recently went to a local French bistro for lunch, they make you order up front, then they make you get your own drinks and utensils. Aside from the no service, the food was mediocre. I will never eat there again. This is the third place, in the last year, that thinks this new approach to eating out is a winner. I will never return to the other two places either, and the food was really good at one and ok at the other.
Seems like more of the shadow work that was discussed in the comments on supermarkets.
And in LA, at some of these new self service restaurants, they add on a “service charge”! Where’s the service, I ordered at a counter?
Theres a term for this ‘ new approach ‘ which I’ve posted previously . Its called ;
Shadow Work … its not all that new … its across the board thru out all ” service ” industries .. Wikipedia has a full write up about it and there are entire books dedicated to the subject
The stupidest thing ? We ‘mericuns keep falling for it hook line and sinker thinking we’re gaining ‘ convenience ‘ when in reality we’re doing the work they’re being paid for .
Aint we just such a brilliant bunch on this ” Ship of Fools ” we’re riding on ?
I’m still trying to recover from self service gas stations. I was forced to learn how to pump gas when I moved to Florida. It’s always nice to be dressed up and have to pump gas.
My mother-in-law, a very elderly lady now, was from a very, very wealthy Cuban family that fled after Castro took over (and imprisoned her father). She was always a princess.
She quit driving altogether when she had to pump her own gas.
Here in Turkey the gas stations are all “full service” and won’t allow you to pump your own even if you wanted to They also clean your windshield and offer a free car wash with a fill up
It all started back in the 1970’s (maybe earlier still in America) when a t-shirt would come out with Coca cola or some such printed on it and then they want YOU to PAY to BUY that t-shirt. WHAT !
That’s free advertising AND you want ME to PAY. Now its everywhere and now includes YOU pumping your own gas, checking out and bagging your own items at the grocery store, pumping gas and now setting the table at the restaurant. What next ….. washing your own food plates after eating ?!?
Modern society sucks.
What drives me nuts now is when you order at the counter they have new iPad-style credit card pay stations and expect you to choose your tip level before you even get the food. No, I’ll decide at the end of the meal how good the food and service was and leave a cash tip. Or more likely, I just won’t come back.
At my daughter’s birthday last month, instead of going out as we usually do, I roasted an organic chicken, made fresh pesto linguine, a homemade loaf of french bread, and a homemade angel food cake, (I’m the cook and baker.) Even with all the organic stuff, it’s way cheaper than going out and less hassle. When I was a kid we NEVER ate out, my mother did all the cooking and we cleaned the kitchen and I’m sure that’s one of the things that helped my parents save lots of $$$. Life seems so much harder now, but eating at home does help to uncomplicate things. It helps that I love to cook!!
Great idea The other advantage of cooking at home is you know how the food is prepared I don’t trust the kitchen staffs after working in one myself years ago and knowing what goes on back there
This. Since I’ve decided I’m allergic to sugar and carbs, I’ve been avoiding rotisserie chicken. They can put a lot of sugar in the seasoning. But I’m looking at getting a toaster oven, and then I can roast my own. Plus there are other things like veggies, and unusual cuts like lamb shank and even chicken hearts, which are actually quite good. Everyone should give ’em a try. https://www.youtube.com/watch?v=QfTe6SoFM-Y
I’m guessing that your mother was a stay-at-home mom. The problem with “doing it all from scratch” these days is that many families require that both parents work to make ends meet. It’s not realistic for each person to work 40+ hours a week and then do an entire other job at home. Families probably have more disposable income but they compensate for their stressed lives by paying for convenience. Additionally, these added conveniences usually end up harming the environment. (e.g. cookies bought in a plastic container versus home-made cookies.)
This is not a very politically correct thing to say, but I think our society functioned better when one person was dedicated to caring for the home/family. This doesn’t mean that the woman always stays home – it could be the man, or maybe both partners work part time. (Two high-powered people have always been able to do this by paying for homemaker services.) If we want to be good to the environment and live happier, stress-free lives, we need to acknowledge that it takes time to manage a home.
Yes, I know, you’ll say that families can’t afford this. But if we did it before, why can’t we find a way to do it again?!
The only other option I think would be the Dutch model where women work part-time.
1. Women work, so there is still higher income, but not a full time job – say 15-20 hours a week
2. Able to balance between kids and work somewhat
3. One of the reasons why feminism came about was because men had total power over the household. With some work, women are not fully dependent on men.
In order for this to work though, wages have to be high enough for families to be able to live on 1.5 incomes and have some money left over at the end of the month to save up.
“But if we did it before, why can’t we find a way to do it again?!”
I grew up in the ’60’s and ’70’s with a working class father and a stay at home mother. There were 5 of us in a 1200 sq. ft. 3/2 bungalow without A/C in Florida. Summers were hot.
Dad did all of the car repairs, home repairs, any other repairs. We had one car. And dad took it to work. Mom cooked three meals a day, every day.
Mom counted the individual pieces of bread in a loaf and would only let us eat enough to get to the end of the week before she bought more.
Most of the people on the street lived that same way. And everyone helped each other out when someone got low for a reason.
Folks could live this way. But you have to get over the idea that some people are going to consider you lower than them. My wife hasn’t done paid work in 20 years. We’ve had to scrimp some times. But I wouldn’t change a thing.
Kent – I was in a Denny’s years ago eating at the counter and some guy was there too and as happens so often here, he was bitching about “The Mexicans” (Note: If you are Hispanic and in the USA, you are a “Mexican”. Get used to it.) I pointed out that all “The Mexicans” were doing is living the way “we” did in the 1950s. Dad goes out and works, Mom stays home and cooks and takes care of the kids and if possible, keeps a garden. The dad gets his paycheck, hands it to the mom, she hands him back his weekly allowance, and she takes care of the household and keeps it all running. Perfect 1950s family. And “we” could erase any supposed advantage “The Mexicans” have by going back to living that way.
I’ve pissed off a lot of “fellow” white people over the years with observations like this.
mmm, my bday is coming up soon. just saying….
Ate out last Friday night with my wife. Fish fry Friday. Food was subpar and the bill was over $40.00. Waited for a table, jammed in and the atmosphere was loud to say the least. Cooked chicken on Sunday over hickory wood flamed grill, broccoli and tomatoes from our garden, salt potatoes and corn on the cob. Sat on our back porch with a 20 mile view. Bill was less than $20.00 and I cooked for seven. It’s a no brainer.
mark simmons – What better place to go for fish and chips than a British pub, right? What better British pub than the big one downtown, with an actual British phone booth out front, Union Jacks all over, the footy on the telly, you get the idea.
The fish was still cold inside. And …. a few hours later I had a new name for their signature dish: Fish’n’shits.
I read on CNBC that restaurants did very well when oil prices plummeted. When oil prices inevitably make their way back into the $100 range I expect restaurants will suffer even worse.
Definitely and it won’t be only restaurants that suffer I think we will be at a hundred a barrel sooner rather than later
IMO that will be a long long time from now.
First, OPEC is cheating and pumping way over the so called cap.
Second, the US rig count is still way up from last year and as long as there are leases to be drilled: drill it or work it or lose the lease if you don’t rules, the O& G companies will continue to drill.
Third, there are around 5,000 or so ‘DUCKS’ in the USA right now – drilled, but uncompleted wells just waiting for completion as soon as the price of oil goes up.
Fourth, China is reducing its imports of oil for a number of reasons. One is that the economy is slowing down, another is that it appears that they have reached the limit for their strategic petroleum reserve.
Fifth, it appears that Japan is beginning to restart some its reactors which will take a bunch of demand off the market.
So there is a whole bunch of supply just waiting to be put into the market as soon as prices go up. Yeah, once all those high depletion wells and ducks are completed and join the production decline curve you may see prices go up in three or four years or……………
A big ugly incident in Saudi that takes a couple of million barrels off the market. I’ve always wondered why somebody hasn’t hit all those big targets just sitting there in Saudi Arabia.
I barely have a reason to leave the house, except to shop for necessities. My gas bill for July was $15. Higher gas prices, I don’t think so.
I was at the thrift store earlier this month and the carts were packed with clothes, toys, and household items. It was like Target used to be, which I rarely go to anymore. When I was growing up shopping thrift was an embarrassment, now everybody does it. Does this sound like an economy which can support higher gas prices?
You would be wrong Once the dollar decline gets into high gear you will see much higher prices at the pump and everywhere else for that matter Count on it
If war comes and it might, then you will see higher oil prices. In terms of the dollar, the only thing that will kill it is the digital money stupidity. Otherwise, there is nothing better to hold then dollars, pounds, C$, A$.
Hate to be the bearer of bad news for the restaurant business across all sectors but many of us in the upper 20% have begun to become pretty much ‘ maxed out ‘ as well . Though for most of us its not our finances but our tolerance for what is rapidly becoming diminishing food quality [ even in many of the ‘ so called ‘ premium restaurants ] along with waning customer service as their costs go up .. the availability of inexpensive labor diminishes .. creating understaffing .. which stresses out those still employed … making the dinning out experience more a chore than a treat
I know we’ve gotten to the point of having gone from eating out three to five times a month when at home … to now perhaps once a quarter if that often .
I recommend Groupon or any other online discount sites which are popular with millennials. Millennials will not eat out without getting some type of deal.
Starbucks has launched a successful reward system that has it’s customers jumping for stars for free Real Value items.
In my family, the backyard BBQ I bought a few years ago has taken a lot of business away from local restaurants. Why go suffer flashing sports screens and crappy background music in a steak house when you can do better at home?
You are fortunate. People are lonely. This is the reason why these places are crowed. Plus this is what cord cutting looks like….
We’re in a recession. Everybody knows it but nobody wants to say it. The illusion of growth sold by central banks and the elite is getting harder and harder to believe.
Nope. The business model has to change. I went to Snooze in the OC, CA. It was so busy. They had great quality food which included items like cage free eggs and other organic items. Note the yelp link: https://www.yelp.com/biz/snooze-an-a-m-eatery-tustin-3
This business has been open for 1 year and notice there are 1.2k reviews.
I wonder about a few factors in this such as:
To what degree have people switched from chains to locally owned or other places? I feel as though there has been a big cultural shift. Things like food and travel TV channels have become popular and they generally showcase unique or interesting things in a local area instead of having shows about how to eat at a chain. YouTube is also full of these things about eating at unique places. 10-20 years ago the chains were often dominant forces in many suburban and middle American communities. It makes me wonder if some of the loss in business is a social change and will be a problem going forward for them. I honestly don’t have a good sense because living in San Francisco, I’d have to go very out of my way to eat at a national chain (and why would I?) and it’s been that way for at least 30 years that I remember.
It seems the chains expect ever growing business, but their income has gone up since 2006-07 (when the economy seemed better for many) even adjusted for inflation. Maybe per capita it has gone down? I don’t quite know. I think per capita spending would be a fairer measure since I don’t have a sense of how much the population has changed in that time.
I find it odd, the expectations many industries have for infinitely rising income when we don’t live in a world that is growing infinitely or can really sustain that. It’s also similar to the overbuilding of shopping malls in that people aren’t going to be able to shop infinitely to keep all the overbuilt capacity afloat (aside from the structural changes to online shopping).
Perhaps people are turning away from corporate “culture”, be it the bland plastic-ness of malls with the same chain stores everywhere, or corporate restaurants with mediocre food and dull uniformity, blighting a thousand suburbs with their standardized sameness.
“Lower 80%” of wage earners? Much better than the usual “99%”!
My neighbours in secure government jobs, technicians and those connected to the (government protected) forest industry are spending on toys as ever.
They never once slowed down, not even in 2008-09.
Talking about “the top 20%” as being wealthy is much more realistic than continuing to promote the nonsense of “the 1%” and “the 99%”.
The cutoff for the top 20% is $75k income. They may make you wealthy in Kansas, but in many places on the east or west coast that does not support an affluent lifestyle.
LOL…I have a neighbor who insists that $15-$20/hour is “not a lot of money”! And that his son the garden maintenance guy is justified in receiving $800 for a two-day job trimming a 100m hedge.
I’m just working on an article on the household income it takes to buy a median home in the Bay Area. Those with $75,000 in annual household income need not apply.
Can you even afford to rent an efficiency in SF on $75k/yr?
That says rather more about the inflation generated by the expansion of the supply of money and credit, via interest rate manipulation, than it does about wages, salaries or what constitutes a defensible house price…
To answer if you can afford to rent a studio on on $75,000/year in the bay area? Yes, probably if you’re a single person. I suspect there are some in Oakland for less than $2,000 a month. My cousins-in-law were renting a studio in their basement in SF as of a couple years ago for around $2,000/month and had many people who wanted it even though it was only about 200 or 250 square feet (I would guess). IDK, maybe they’re charging more now.
The thing is that you’re spending somewhere close to 1/3 of your income on rent if making 75k for a tiny studio. Maximum 1/3 of income on housing was always the guideline I heard about 20+ years ago, though though now I hear people saying you can go higher into the 40-50% range, which I think is really a bad idea for most people and not a sustainable way to live or have any future or savings for something unexpected.
I can’t imagine trying to sustain a family on 75k a year in the bay area (with all the expenses and also needing a bigger place). Households of more than one person in the bay area living on less than 75k a year have my sympathy since it would be very difficult without resorting to things such as cramming many people into a tiny space, sharing rent or other expenses with someone else or those kinds of things. Even for a single person, 75k a year isn’t enough to live well in the bay area unless you’re in some situation such as having bought your home 20-30 years ago when things were 1/3 to 1/4 the price they are now. (Or one of the lucky ones with rent control and then you can never, ever move from your apartment.)
I have a total household income in Massachusetts of ~$155k and I feel fine, but not flush. I’m not sure how others are getting by in this asset, healthcare, and education inflation environment.
That’s very true but if the debt issue eventually starts effecting the federal govt as it has the state of Illinois for example that gravy train may just come to an end Actually that would be just fine with me
I’m trying to come up with a namebrand for my new ‘low class’ concept restaurant idea … either Bankster Fryhaus, or 20%er SecretSauce …
…. having trouble deciding which one to go with ….
I just sure the line will be a long one ! … ‘;]
There is a must-eat item on your menu: “Double Whammy with Cheese”
“Dould Whammy with Cheese
… served between a fine pair of ‘VC white shoes !’
but let me offer an alternative reading.
Chain restaurants are conduits for corruption and laundering drug money. You can use a franchise to front for illegal drug revenue, because food costs cannot be listed in a one to one accounting form, they list in a ratio, and in some cases it is more profitable to throw away food the distributor sends you, or sell it on the black market, and drop the proceeds from illegal activities into the till.
Food service is a notoriously corrupt industry, and have you seen even one instance where a big distributor had some trouble, (beware of the dog that doesn’t bark) The Mafia has always used restaurants as a front for some other business, the franchise chain just made it legitimate, and listed on the NYSE.
So what happened? Pot went legal for one thing. Meth is real home cooking, while Opiods and heroin come through different channels. (I’m not a druggie myself) But the alt-alt reading is that the economy is really improving, somewhat, and when people get their hands on real (sweat) money they tend to get defensive about it, its easier to spend what you don’t have if you get my drift (if someone will let you).
One Two, better economy, change in the underground drug economy. Oh and they overbuilt.
Fantastic, and makes perfect sense.
Ooh yes, this post.
I live in San Jose, CA. And I swear, without pimping and prostitution, drug and human trafficking, money laundering, and 1000 over types of corruption, this city would come to a grinding halt.
Lol… I always read non-sense lame comments from this guy…(you’d think he was living in Johannesburg or Mississippi.
Dude, get it through your head. The silicon valley is thriving and tons of people make a lot of money. A LOT.. why do you think house prices and rents are crazy high, crazy traffic… because people make money to pay it for it all.
I know plenty of Mexicans rolling in dough from: Landscaping, fixing cars, handy man jobs making bank. Don’t need a engineering job here to make dough!
**There’s so much money going around here in SF Bay and SV that even the illegals-for-hire-help at home depot/orchard supply charge/want $30/hr + paid lunch just to try to work.
If you, as an American with all the advantages all you life, can’t get a better job than $10/hr in the Silicon Valley economy… then my sentiments to you..
Ehawk – We agree. In Company X, that’s a tech co., they’ll hire engineers but get ’em cheaper than H1B’s if they can. And those engineers/programmers have to put in 60-hour weeks, keep learning new stuff all the time, and once they’re 40 they’d better have something that’s not tech lined up.
You know who makes the same amount? Sally in HR. Bob in Accounting. Snyder the handyman. They have to learn some new stuff, but it’s not the same kind of treadmill. They just have to do their HR stuff, or their accounting stuff, or fix that leak in the A/C and look into that tear in the carpet in the corner office. No 60-hour weeks. And when they turn 40, they’re *more* valued because of experience and “seniority”.
Yeah no shit there are Mexicans etc doing things like landscaping and living high on the hog. That’s my point. If you’ve got a young healthy body and can crank away at work like that, it’s a better career path than college for I’d say 99% of people.
I know of one city where Turks own a very (abnormally) high % of hair salons, cafes and restaurants.
The powerful Turkish drug and prostitution gangs are well-known.
Quite possibly a connection…..
I stopped watching Spanish soap operas because now they are all about drug cartels. So, I started watching a Turkish one on Netflix, guess what, it was about a drug dealing clan, but they were very religious.
During jury duty a couple years ago I asked one of the bailiffs (who was explaining his normal daily responsibilities were out at the prison) where all this heroin is coming from?
He told me anyone can cook it in their garage, it’s not an import.\
I attribute this lack of understanding on MSM assuming they must have their reasons for not reporting the detail.
Burger King offered 2 Whoppers for $5 like 20 years ago and now they have a buy 2 for $6. The fast food wants your money very bad.
When we travel to town, we eat Chinese. Fresh ingredients,
carefully prepared, nutritious…always easy on the pocketbook.
As someone from China myself, now living in Canada, I cannot recommend many Chinese restaurants.
The excessive use of MSG and a few other ingredients makes me question what is being added to food.
Stomach cancer is high in China:
That isn’t to say that Western food is great, because there are a lot of unhealthy Western chains too. Just be careful – I’m sure that some Asian restaurants are healthy, but many are not. It can be deceptive.
MSG doesn’t bother me so much, the panic about it is a hype, like the panic about “gluten” for people who don’t have celiac disease (most of you, you fools) these days.
That being said, I don’t go to Chinese restaurants because: The food’s full of of sugar and starch, because sugar and starch are cheap. It’s often not very fresh at all, as old leftovers off of customer’s plates are often “recycled” and end up on yours. There’s a certain level of spoiledness you can’t fry away, but Chinese restaurants will try, anyway.
Chinese restaurants in this area cater mainly to a surfeit of Chinese patrons. These are not stupid people. With my Chinese relatives, I have eaten in probably close to a hundred Chinese restaurants over the past 15+ years, some excellent and some mediocre, without experiencing what you describe. A restaurant that operates like that would not survive. Not a fair stereotype.
Ok … here’s a shout out for Thai food !!
Usually very good restaurant fare ..
Also rather easy to make at home …
… actually I can prepare/replicate almost ANY restaurant
entr’ee if I have the needed condiments/spices … it not too hard to do, and you have the option to substitute ingredients depending on what’s on hand in one’s ‘larder’!
Chinese food healthy? Most Americanized versions are loaded with sugar and fat.
The good news is that official price (CPI) inflation has been controlled by the FED (with a large helping of hedonic adjustment), wage inflation has been controlled and benefits cut by the employers, and the rentiers are increasing their income. The bad news is they are “killing the goose that lays the golden eggs.”
Ever read Keynes’ “The General Theory of Employment, Interest and Money”? What I took away from the book was that the true wealth of a nation was…A nation of consumers willing and able to spend….
A nation of consumers willing and able to spend is the perfect definition of a vibrant middle class. The system has indeed, killed the goose that laid the golden eggs…I thought this 20 years ago, and nothing has changed for the better.
I hate eating out and have very simple eating habits… if I eat, i eat healthy and in a very simple restaurant although not because I can’t afford but this is the way I am
a lot of people make fun of me because of this
a lot of girls quit on me because of this as well
my friends splurge on expensive restaurant and make sure they are sharing this via pics on facebook :-)
The people who eat out are the same people in the grocery store who NEVER look at the price of anything.
Which are you?
Today I stopped at Winn Dixie ( better wine selection and 10% off with 4 bottles) to shop. I got want I needed but thought, hummm seems the grocery prices have gone up, so skipped the whim items. So the few items I did not get, I decided to try Publix…..HOLLY MACKERL, they were ( on average) a minimum of 20% higher for the same item. Roman at WD was 2.99 and at Publix it was 4.59…SAME brand ‘Fox”. WD, coke 3 for 12, Publix 4.99 each.
Yep, the shopper at Publix never looked at the price, they just put it in the cart. Now, this is why Amazon bought Whole Foods.
WF shoppers look at the ingredient labels. This is the reason why there is a premium on the products. This is changing rapidly as WF has placed conventional fruits and vegetables where organic fruits and vegetables sit. The cross contamination between these two groups of food conventional versus organic is noticed by the shoppers.
New York has at least three times more restaurants than needed for the business to be profitable. I guess things are bad too in other big cities?
On food quality, here’s some perennial wisdom from my great-grandmother, born in the 1870’s:
‘Never eat a sausage, a pie or mince made by someone else (out of the family, that is): only eat a whole joint, cut or bird.’
This rules out nearly every place discussed above….
Stay at home, cook yourself, and eat well. If possible, raise the animal yourself.
Most people can’t do that, lack of space to have animals or is not legally allowed to have farm animals in city grounds, too many work hours to do something else and so on.
And the problem here is that there is both too many restaurants for it to be profitable and that both restaurants and take out tend to be the first thing people stops doing when they have money troubles.
I have always seen it, every time a crisis hits restaurants close down.
FWIW, hawks will swoop in and kill your yard chickens not to mention damage done by other wild animals. There are tons of hawks, etc. in these parts.
That’s what the steel wire is for, you basically make a big cell around the chicken coop and remember to cover the top with steel or iron wire. But is not legally allowed to have farm animals in city grounds in a lot of cities.
” People have been waiting for years for these real wage increases. But it’s just not happening.”
I’ve begun working on my procrastination issues. Just you wait and see!
Statistically the middle class has lost ground to real inflation every years since 1974 and now makes less in real dollars than it did in 1999 so yeah the restaurant business is screwed. On the other hand if we could get the rich to eat more….