Wednesday, October 10, 2007


I like to look at restaurants to see far out trends. Are people buying fancy alcohol (good times are here for a bit), are price increases being accepted by customers?

At Ruth Cris,

The company said average check increased 3.4 percent, driven by higher bar traffic and higher prices. That was offset by a decrease in entrees.

Ok, a little contradictory, higher alcohol sales is good... less food. Fewer customers... are the few customers going in needing to get drunk? ;)

Ruby Tuesdays

Still in the black but declining profits.

Down analysis on restaurants
Basically, fast food restaurants are offering salads, so family sit down places are suffering as people have neither time and are trying to save a buck.

Perhaps other retailers are suffering because everyone's shopping at Costco.

Not a great article (the title was wasted on it), but a good point. The discount stores prosper at the expense of other retail. Why? People NEED to save a buck.

What about other industries?
Tighter refining margins. Is that less demand? ;)

Food inflation
This morning, your bowl of cereal and milk probably cost you 49 cents. Last year, it was 44 cents. By next year, it could be 56 cents. It's enough to make you cry in your cornflakes.
later in the article:
The big picture, at least in the U.S., is that higher food prices don't hurt like they used to. Today, about 8.5 percent of the American household budget goes to food at home, down from an average of 19 percent of the total budget in 1960, Wyss said. While food inflation is high, it's not hyperinflation, he said.

No its not "hyperinflation," but the grain going into J6P's beer is getting pricier!

I'm bearish on the restaurants. Will one or two chains do well? Sure. Most won't. I'll be curious to see how the better ones adapt.

We'll have to keep doing meals to keep our favorite places in business. ;)

Got popcorn?

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