More Pain, Still No Gain
Here is another piece on the collateral damage from the subprime crisis being inflicted on the restaurant industry:
Restaurants, diners face tough economic times
Experts are calling this the toughest era for restaurant companies in years as regular customers cut back on eating out in response to ongoing economic woes. “It’s a perfect storm, with the industry being bit by several negatives at the same time. And we don’t think gas prices are at the top of that list,” said Ron Paul, president of Technomic, a food industry consulting firm. Many restaurant chains are stepping up their efforts by offering gift cards, takeout options, advertising and other ways to vie for consumer attention. [C]onsumers are having their pockets picked by high energy prices, declining home values, tightening credit from the sub-prime real estate bust and the falling value of the dollar, which makes imported goods more expensive.
P.F. Chang’s China Bistro Inc. recently reported a nearly 20% decline in third-quarter profit from a year earlier. [...] Brinker International Inc., owner of Chili’s Grill & Bar and other chains, reported a 21% drop in fiscal first-quarter profit. “[F]amilies are coming less often, and so are all of the gardeners and small-business contractors we used to see so often,” he said. “People still have money in their pockets, but they have less of it to spend.”
That all being said, we are doing pretty well at Monti’s, under the circumstances. (Off a little bit from week to week, but also up here and there.) At times like this, it is good to have three generations of customers around town. But I wonder about the cumulative effect of all of these negatve conditions over the next several months.
