During a decade of easy credit and loose spending, American businesses built too many cars, houses, stores and factories. It turns out the country built too many restaurants, too.Now consumers are cutting back, and dining out is among the casualties. Finer restaurant chains have been hit hard, and so have the casual sit-down places that flooded suburban shopping centers and tourist districts across the country, aimed straight at middle American tastes.
A few chains have boarded up already. Many others are going into survival mode, trying to renegotiate their loans, cutting staff, offering bargains to customers and closing less profitable restaurants. Analysts predict thousands more restaurants could close in the next year or two.
The pain is evident even amid the neon glitz of Times Square, which draws big crowds of tourists used to eating at places like Red Lobster and Applebee’s.
Zane Tankel opened an Applebee’s franchise there eight years ago. At the time, he said his nearest real competition, an Olive Garden, was about six blocks away.
Now, Mr. Tankel could sit in his restaurant and throw rocks through the windows of a half-dozen competitors, including ESPN Zone, Dave & Buster’s, Chevys and Dallas BBQ.“We’ll see some weeding out,” he said one recent lunch hour, sitting in a near-empty Applebee’s dining room overlooking 42nd Street. Noting a restaurant above him and another across the street, he said, “One of the three of us is not going to be here.”
Mr. Tankel’s fears are shared by many analysts and consultants, who say that a decades-long expansion produced too many restaurants even for a good economy, let alone the worst malaise since the Great Depression.
Since 1990, the number of restaurants and bars has grown to 537,000 from 361,000, a 49 percent increase, according to the National Restaurant Association. Population in the United States grew 23 percent in that period.
Amid the seeming prosperity of a credit-fueled era, people got in the habit of eating more and more of their meals out. The association’s statistics show that 48 cents of every food dollar is now spent at restaurants, compared with 40.5 cents per dollar in 1985.From: NYTimes.com Read full story here.
How are you effected by this crappy economy?
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6 comments:
How true this is. When I think about it I have noticed anyway more and more people are ordering less , and paying with cash more. I think in the future for a while a lot of people will eat at home. Everyone's credit card is maxed and they fear for their job. A lot of restaurants will drift off.
well... I'm leaving a border town that is dependent upon tourist dollars, mainly from the U.S. The hotels and restaurants are holding on to an optimism that our season will begin any minute now, and it's not looking good.
We don't and never have used credit to eat out - but we did enjoy many a meal at a local chain and became regulars.
We haven't gone out to eat since January. Not because my husband's job has changed or lower pay...it is just that everything else we purchase [gas, food, clothing, essentials] are all so much more expensive.
I don't have it in our budget to eat out anymore on "datenight" we simply stay in - like when we were poor newlyweds.
And I can't blame it on the prices at the local place because they haven't raised them. It is just we are spending so much more on other needs, no luxuries are to be afforded.
Which, to us, is fine. Because that is what dining out for US was - an absolute luxury.
One corner near us the Chili's and Red Robin and a fancy steak place just closed. Happening all over town here.
For once in my career, I had the luck of timing. When I left two years ago, Restaurant Managers were sought after goods. I know one GM who is now waiting tables at a Country Club. I miss it less and less each year.
Three chain restaurants in my area are dead every Friday and Saturday night..
A family member of mine just got hired at one, she was promised $300 a weekend in tips .. but she makes nearly $150 .. The $300 figure was most likely years ago when people went to eat..
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