Restaurants struggle as consumers eat at home

Source: USA Today

Cash-strapped consumers are getting reacquainted with cooking at home, and that's been bad news for restaurants and their stocks.

The dining-out industry is suffering through a major fire in the kitchen. Slowing business is forcing chains to shutter locations. Restaurants that remain open are seeing a drop-off in sales.

Shares of the top 26 restaurant companies have seen their stocks lose an average 49.3% of their value from their highest points over the past 52 weeks. That's been an even harsher pullback than the 46.5% decline of the Standard & Poor's 500 from its 52-week high.

There's even deeper pain suffered by individual restaurants and their investors. Ruth's Hospitality (RUTH), operator of the Ruth's Chris Steak Houses; DineEquity (DIN), which runs IHOP and Appleby's; and Ruby Tuesday (RT) have all seen their stocks fall nearly 90%.

Meanwhile, 20 members of the retail and restaurants industry classification are dangerously close to having trouble keeping up with the interest payments on their corporate debt, S&P says. That makes it the third-most-pressured industry group among the 21 that S&P considers the weakest. Meanwhile, nine of the top 26 publicly traded companies have posted losses in their most recent quarters.



Read more: http://www.usatoday.com/money/industries/food/2009-02-22-recession-struggle-restaurants_N.htm

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Chart at bottom of article showing how the chains are doing.

Unless I'm out of town and there's nothing else around. Local is the only way to go when you eat out!

the airport or on a tight schedual.

employ a lot of local people. The one I work for employs about 40 people. Pay is good, and they offer insurance that's really inexpensive. I've worked in the restaurant industry for 14 years, from local restaurants to distributors. They (locals and chains) can co-exist. In the winter, everyone up here closes, with a few exceptions. Our local restaurants, again, with a few exceptions are expensive. So, in the winter, we're quite busy. We're busier in the summer as well due to our location, and being geared towards family dining makes a difference.

:hi:

just don't get. Big businesses employ local residents.

Locally owned restaurants not only employ local residents, but the profits aren't wired out to HQ.

a good chunk of it goes right back into payroll, which is then spent locally. We also raise money for local programs, and donate quite a bit of money as well.


Now, McDonalds in Maine, uses Maine potatoes. When they sell their lobster rolls in the summer, (Maine McDonalds) they are using local lobster.

No matter how much they spend on payroll, how many donations they make, or how much they raise money for local programs, at the end of the day they have to send that money to HQ.

Local restaurants do all of the above too, but the profits stay in the community.

All else being equal (and I know that sometimes all else isn't equal), it's better to support the locally owned business.

But, another point I'd like to make is that these chain restaurants started as local small businesses as well. They were successful, and opened more restaurants.

Like I said, they both have their places and can co-exist. They're not all "evil" as so many here seem to think.

I have worked in the restaurant industry for over 14 years. From waitressing, and management of a local restaurant, to working for a foodservice distributor. The best place I've worked for in 14 years is the chain restaurant I'm working for now. They don't treat their employees like crap, they pay well, and have many other perks as well.

Would you stop supporting a local business if they branched out and opened more stores?

I support local businesses also.

Also, many of my friends own local restaurants.

Chains mean I can know what to expect I have to eat somewhere that's not in my town. For someone who is forced to be a picky eater cause of biology (yes, it really is biological, I have texture/indigestion issues with many foods) it's nice to know that this chain restaraunt has something I know I can eat. I eat at some local restaraunts near home but if I'm away from home I prefer to eat in a chain for that reason unless I can find a diner or something since they have pretty predictable, plain food too.

BDSM restaurant is hard to find!

Like voting for any Reeps, especially Reagan and Bush.

Or being Bush and all those crazed limbaughtomized
lunatics who think paranoid self-interest and
greed should drive countries and economies...

they wouldn't be conservative.

and new owners are opening it as an Italian restaurant.... not that we don't have one on just about every corner....


As for the chains???
on a weekday try to get a table at the local Cheesecake factory
people love to lunch there

or a table at any other chain on a weekend night


lost

and I've personally reached that point. When I get the check and think: "that's too freakin' high", it's time to eat at home.

A good steak or seafood at a decent restaurant. Where the check would come to maybe $25 to $35 for me. Haven't done that in some months unless someone gives me a gift card for holidays or BD. And won't be happening anytime in the near future. I still eat out being single and working late, but I try to keep it in the $10 or under range and I've dropped soft drinks or ice tea for the most part for water. I will treat myself to a beer or a wine once in awhile.

If you are going to spend a Ruth's-sized tab, an fine local, unique restaurant would be much more interesting and appealing.

A daughter worked a summer at a Ruby Tuesdays. Out of basic loyalty and common sense I don't eat at Ruby Tuesdays.

who knows if they still are. In any case, I'll never set foot in one.

Pricey steak house, but the steaks are the best I've ever had. The prime rib is to die for. It's a proper, local, high-end Wisconsin supper club, and the owner has been a community fixture for decades. He treats his employees well, from what I hear. The bar is, of course, well-stocked. :)

Delaney's stomps any chain into the ground and grinds them into gristle.

Todd in Cheesecurdistan

$30-something for a mediocre steak, additional for the stinkin' side dishes, and a waiter trying to pawn off a $200 bottle of wine on us. I'd rather pay $7.95 for mouth-watering beef quesadillas at my local Mexican dive.

I went out the other day to a small restaurant in this teeny town and 2 frigging sandwiches cost 16 bucks..i mean, really!! they raise the prices and i stay home, they lower the prices, i will go. its pretty simple. i can make a pot of beans for pennies.

Weekend but I'll just bet not many have extra bucks for going out to eat like they did before.

I notice a lot of Restaurants advertise on tv their very special deals.

I don't go out to eat at all because there's no place around here I want eat at..so I've been cooking at home for years.

as she mentioned that we should see an increase in business as more people eat at home. "Ya, know ...... people that work in restaurants buy groceries too".



I got one of those OMG, deer in the headlights looks back (guess we never thought of that one).

nasty suppliers, no thanks.
Chain places are crap. Generic food stuffs with too much salt and zero thought.
And sorry, but in this day and age, 40.00 for a meal for two is a hotel room on the beach for two nights in deep Baja.
I would rather have Baja.

who do you think supplies the local restaurants?


Sysco
USF

and others

they don't go to the grocery store, and if they are (I know that some do) they're using the same products anyway, just paying more for them, same packer usually just a different brand name. Some of them may be lucky enough to grow their own veggies, or maybe have a local meat supplier. Small folks, unless they're charging a lot for their plates, don't go all organic either. Just because they're local, doesn't mean their using completely different products than what the chain restaurants use.

touting the savings that can be realized by eating at home.

It is cheaper to buy organic and eat at home than buy processed foods in a restaurant.

the one I saw was bragging that you could save 400 a yr by just skipping eating out once a month. I thought it was disingenuous.

400 a year is about $33 per meal, and that's less than we typically spend.

closed within one city block of each other. More to come, I suspect.

But for fuck's sake! All those places are unbelievably awful and I'm glad people have to eat something else! anything else!

I'm veg*n, and there are few restaurants where I can get a decent meal. Buffets, like the Ponderosa, have enough choices that I can enjoy it and get enough to make it worth my while.

I get so tired of the restaurant snobbery on DU.

Why are you vegan if you don't care what goes into your body? Sorry, I know it's none of my business, but it's not snobbery. Those big chain restaurants buy the cheapest bulk crap and load everything with fat, salt and sugar to cover up the fact that everything is overprocessed and not at all fresh or good. Sure, sure there are plenty of lousy locally owned restaurants, but I don't go to those either. I also don't go to the overpriced idiot places. If those were my only choices, I'd never go out to eat.

sorry for you.
I live in Oklahoma, and there are amazing local restaurants that my husband and I eat at. We're both stricts veggies, and the places we eat at cater to vegans. If you can eat healthy as a vegan in Oklahoma, you can pretty much do it anywhere without resorting to eating at garbage buffets. Egads.
If you think that's snobbery, I don't know what to tell you except that you have a low tolerance for people perhaps.

all the ones I've stopped at in OK during road trips have been very good - and the roadside restroom facilities clean!

pizza, Italian, home cooking places - it is hard to find good local places with ok prices

but you're right. They're also usually more expensive. When I first moved to Portland, I was a big "no chain" person. Then about a month ago, I lost my job so I don't eat out at all now.

I think everyone is cutting back. I feel worst for the owners of these local places all over. They're going to feel the hit harder than anyone. The only kind of "restaurant" industry that will do OK through this is McD's and other fast food joints that offer a lot of calories for a very low price.

It went down a dollar in this new year - I go and get one meal to go and eat it the next night - it is two sides and main dish - so you can get a salad and veggies

Some restaurants have rats, roaches, and who knows if employees really are washing their hands or not. I'd rather prepare my own food so that I know it's as sanitary as can be.

I will eat at Culver's once in a great while b/c every one of those I have been to have been exceptionally clean.

When I went home last week me and my girlfriend went to the Olive Garden at Main Place in Santa Ana and the Market Broiler at the Block in Orange in Orange County nand both were deserted, even fairly recently it was difficult to get a table at the Olive Garden.

I really can't remember being in a totally empty Olive Garden before,

not just a line, but shoulder to shoulder packed. Waiting time for a table is anywhere from 10-20 minutes. Weekdays aren't too shabby either.

prohibitively expensive. Some prices went up when the price of fuel was higher and they never came back down when it dropped. I have changed my habits substantially.

I was at a local Italian restaurant recently and it was packed. The only restaurant to close recently has been Denny's and that was about 12-16 months ago.

the restaurants are relatively empty. We used to go out almost every night. Then, we became very conservative financially (in terms of the budget) a few years back, because we couldn't shake the feeling that the U.S. was headed for an economic crash. So, we joined a CSA (community-supported agriculture), and began eating at home. We're much healthier and lighter; that's for sure.

Businesses are closing by the dozen each week around here, including restaurants.

were people who still ate at home in this area. A few eateries stay afloat just being open during the week to cater to the RTP lunch crowd. Every time I pass any of the fast food chains, especially McD's there are lines at the drive through.

Then people in restaurants lose their jobs. Makes me think we should bite the bullet and go out!

We just have to go out and do stuff again without worrying so much and maybe we can get going again.

It's really strange how we let ourselves get psyched out and hang onto the money, yet what good will it do us if everything contracts so much?

I feel myself doing it, too. But I'm thinking we all have to get hopeful and move, or else everything will collapse!

He said while there business is off - people are not tipping. He said he's lucky to get $20 in tips on a good night, which is split between wait staff, runners & busboys. He would, in better times, make $60 or more a night.

and I hardly ever eat at restaurants, except for Piccadilly Cafeteria for lunch on alternative days, then always gumbo, veg and cornbread for about $5. MMMmmm A nice alternative to homemade soup all the time. Used to be, it was hard to get in the Pic at lunch, the line would stretch to the door. Not so much anymore, because no buses of schoolkids stop there anymore - local education budgets are too strapped for kids to travel. If I do go out for pizza - maybe once every two months - I make sure it is a local place. Much better value for the dollar and so much tastier than chain pizza.

:shrug: Cheap food is "in" I guess. Wonder why? :think: