Restaurants are full or not

Discussion in 'Economics' started by nutmeg, Mar 21, 2013.

  1. What Your Local Diner Can Tell You About the Economy

    Jeff Saut, chief investment strategist at Raymond James, disagrees. In the attached clip Saut joined Breakout to explain why the hiring activity of casual dining establishments is one of his favorite tells for the economy. "If you travel around the country, as I do, the restaurants are full," Saut tells me in the attached video. "That's not the kind of thing you see going into a recession."

    Americans Cut Restaurant Spending as Taxes Bite

    Restaurants are reeling from their worst three months since 2010, as American diners spooked by higher payroll taxes cut back on eating out.

    Sales at casual-dining establishments fell 5.4 percent last month, after declining 0.6 percent in January and 1.6 percent in December, according to the Knapp-Track Index of monthly restaurant sales. This was the first three months of consecutive declines in almost three years, with consumers caught in a “very emotional moment,” said Malcolm Knapp, a New York-based consultant who created the index and has monitored the industry since 1970.
  2. AbbotAle


    A good example of why trading/investing is so hard - there's normally excellent reasons one can make for both the upside and downside and only after the even was it obvious which view to take.
  3. wartrace


    I tend to believe the numbers rather than anecdotal observations. It's the same thing when people say "The malls are packed so the economy must be good". All that matters are the sales numbers.

    My opinion? I have to think the return to normal payroll tax levels AND 3.50 a gallon gasoline HAS to be taking a bite out of " Joe Six pack's" discretionary spending.

    My favorite "gauge" of the economy is the beer cans the drunks throw out of their car windows.

    In 2003- 2008 I saw quite a few Bud light cans. In 2009 the cans were primarily the cheap stuff and for two great years (2010-2011) it seemed as if the poor drunks couldn't pursue their hobby at all. I started seeing more cans in 2012 and now they are back on the Bud light again.

    Another indicator is fast food trash. It was bad in the mid 2000's and seemed to almost completely stop for a couple of years. I am now seeing more of this litter meaning people can afford to spend 6 or 7 bucks for dinner.
  4. Pekelo


    I dunno, I like to believe in my own eyes. About 2 months ago, we went out to eat on a Wendesday evening, about 6 pm. It was next to a Mall with 5-6 restaurants around. The parking lots were FULL. We took the bar seats, otherwise there was a waiting time. Not juts one of the restaurants with some kind of deal, but all of them.

    Again, on a boring midweek evening, not on Fr or Sa night. I thought to myself, if this is the recession, I want in....
  5. clacy


    It's very difficult to "eyeball" customers for retail, restaurants, etc.

    Even if the place is packed, you don't know if the customers are trading down and not buying an appetizer and maybe they are buying water instead of a drink. Or only buying one beer with dinner instead of two.

    Little things like that can equate to a 5% decline in sales very easily. For a business with low profit margins to begin with, that can be problematic.
  6. Okay I think I got this figure out.

    Restaurants are busy "packed" hey, that's what our eyes tell us.

    Sales are down, that's what the chart tells us.

    Management incompetence. Looks busy -not enough staff, poor service times, people waiting for food, perhaps out of stocks.

    And of course as another poster mentioned, quite possibly people order less, cheaper foods, maybe only order low margin specials, use discount coupons (ie Groupon which every owner is complaining about).