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The long shadow of the economic meltdown continues to hold the economies of the world at bay. The worst maybe over, but the boom times have not returned.

The latest indicator: restaurants sales in the US are flat!

http://www.slate.com/blogs/business_insider/2016/06/27/americans_reduced_restaurant_appetite_bad_for_u_s_economy.html

Weak growth in the restaurant industry is a warning sign for the entire economy, Nomura analyst Mark Kalinowski told Business Insider.

People need to eat, and when they pull back on restaurant spending, it’s a clear sign that they aren’t feeling confident about the economy.

“The whole restaurant industry in aggregate is pretty lackluster,” Kalinowski said. “It’s not impossible for things to get better, but it does look like the odds are against a rebound.”

So, when will happy times return, and will it get worse before it gets better? How long can corporations sit on their piles of cash? What will it take for consumer confidence to improve? What does Uncertainty even mean in the economic sense?

Let's talk all thing economics!

The good times will return when eventually the super rich and the governments come to understand that to have a restaurant industry ordinary people need to be able to afford to eat out occasionally.

Abramovich is worth many billions of dollars, but he isn't going to eat a billion pizzas or whatever a year.

Fast Food sales have been declining for years because people aren't as interested in spending money on food that's bad for you. The rise of the foodie craze has more people taking an interest in cooking for themselves. There are multiple factors involved.

While this is obviously not a good sign, it's just a symptom of something we've known for years. Wages aren't growing, income is flat, the economy isn't growing much at all, employment and labor participation is low.

Industrialized nations are seeing rapid technological progress and global competition for labor and it's having a negative effect on jobs and income. The problem then gets exacerbated by politicians pandering to people and inacting counterproductive protectionist policies.

No, they've been going up for years.

http://www.statista.com/statistics/196614/revenue-of-the-us-fast-food-restaurant-industry-since-2002/

Meanwhile the quality of food at restaurants has been declining. If I wanted to thaw something out and eat it I can do it at home for a lot less. The quality of food at Red Lobster plummeted. I could get better food at Aldi.

 Monkey Tamer wrote:
Meanwhile the quality of food at restaurants has been declining. If I wanted to thaw something out and eat it I can do it at home for a lot less. The quality of food at Red Lobster plummeted. I could get better food at Aldi.

This. The entire industry of "sit down" chain restaurants is killing itself with this low quality food at high prices.

 feeder wrote:

 Monkey Tamer wrote:
Meanwhile the quality of food at restaurants has been declining. If I wanted to thaw something out and eat it I can do it at home for a lot less. The quality of food at Red Lobster plummeted. I could get better food at Aldi.

This. The entire industry of "sit down" chain restaurants is killing itself with this low quality food at high prices.

Me an my wife stopped eating at Applebee's because of the clear decline in food quality. They started using frozen partially cooked steaks. That was probably the biggest strike against them.

But I agree the overall quality of food and service at the big name sit odwn chains has taken a tumble. We try to go to the local mom and pop places when we can now.

Ugh, I would never touch Applebee's for steak. Appetizers only there. Maybe a fajita rollup. But that went to hell too. I now avoid the place. I'd rather cook for myself or go to a local place. Chains suck.

I went to Applebees twice in three decades. It sucked both times.

Where I live, restaurants are full all the time. Who knows.

 Frazzled wrote:
I went to Applebees twice in three decades. It sucked both times.

The only time I went to Applebees, it was so inedible I left the majority of my food on my plate. To add insult to injury, it was so expensive I felt robbed.

It was a steak, to agree with SickSix. It had the taste and texture of a hockey puck.

 Ouze wrote:

 Frazzled wrote:
I went to Applebees twice in three decades. It sucked both times.

The only time I went to Applebees, it was so inedible I left the majority of my food on my plate. I felt robbed.

Why in the world are you guys bringing up Applebees when the thread is about restaurants? You get the mods are always yelling at us to stay on topic, right?

Heh. It was the first time I had ever been there, I didn't know it was inedible garbage!

And for 3 people it was, iirc, like $70 or so. I was pissed for days.

 Chongara wrote:

 Ouze wrote:

 Frazzled wrote:
I went to Applebees twice in three decades. It sucked both times.

The only time I went to Applebees, it was so inedible I left the majority of my food on my plate. I felt robbed.

Why in the world are you guys bringing up Applebees when the thread is about restaurants? You get the mods are always yelling at us to stay on topic, right?

Fair point.

 Kilkrazy wrote:
No, they've been going up for years.

http://www.statista.com/statistics/196614/revenue-of-the-us-fast-food-restaurant-industry-since-2002/

I stand corrected. My perceptions were probably being colored by iconic fast food brands struggling, like McDonalds.

 Ouze wrote:
Heh. It was the first time I had ever been there, I didn't know it was inedible garbage!

And for 3 people it was, iirc, like $70 or so. I was pissed for days.

o_O where do you live? I pay more than that for a decent meal for two people around myself.

Then again, the boss likes high end places and I like beer.

I went to Olive Garden once and it was pretty good, frankly. I didn't have high expectations but they were exceeded. This was in Miami in the early 2000s.

We also went to a high end seafood restaurant on Ocean Drive, and my mother was served a dodgy lobster tail and spent the night projectile vomiting around her hotel room.

Great times!

A few years earlier I had part of a fajita like object at a so-called Taco Bell in JFK Airport. It's almost certainly the worst meal-like offering I've ever had in my life. The food in Moscow and Leningrad in the late 1970s was better, seriously. (Vodka and orange, 1.5 Rubles = £1.)

I've sworn off enough chains that I shuld go ahead and swear off all chains in general.

Ruby Tuesdays has actually made me physically ill.

The Red Robin where I live is pretty decent, but the rest of the chains are slowly dying. We have a great independent scene here though. Why pay for dressed up fast food when you can get amazing hand crafted stuff for the same price?

Do four or five restaurants count as a chain?

 Frazzled wrote:
Do four or five restaurants count as a chain?

I'd say no. Four or five links is hardly a chain.

The phrase 'Happy Meal' just got so much deeper in meaning in my mind!

 Easy E wrote:
The long shadow of the economic meltdown continues to hold the economies of the world at bay. The worst maybe over, but the boom times have not returned.

The latest indicator: restaurants sales in the US are flat!

http://www.slate.com/blogs/business_insider/2016/06/27/americans_reduced_restaurant_appetite_bad_for_u_s_economy.html

Weak growth in the restaurant industry is a warning sign for the entire economy, Nomura analyst Mark Kalinowski told Business Insider.

People need to eat, and when they pull back on restaurant spending, it’s a clear sign that they aren’t feeling confident about the economy.

“The whole restaurant industry in aggregate is pretty lackluster,” Kalinowski said. “It’s not impossible for things to get better, but it does look like the odds are against a rebound.”

So, when will happy times return, and will it get worse before it gets better? How long can corporations sit on their piles of cash? What will it take for consumer confidence to improve? What does Uncertainty even mean in the economic sense?

Let's talk all thing economics!

 Easy E wrote:
So, when will happy times return, and will it get worse before it gets better? How long can corporations sit on their piles of cash? What will it take for consumer confidence to improve? What does Uncertainty even mean in the economic sense?

Let's talk all thing economics!

People will talk about lots of things that government should do. Every single one of those suggestions will be wrong. All of them. Government is essential for stabilising or moderating the economy, but it can't create long term growth. And sure, the government can do a lot to improve equality, but that won't create long term growth (there are some people who are argue equality is good for growth, but that stuff is mostly imagination at this point).

Basically it really is a case of sitting around and waiting for productivity improvements to drive new economic activity. This has been how it's worked before now, things stagnate and then electricity replaced steam in factories and suddenly we have the ability to produce more goods at cheaper prices and that drives more jobs and higher wages and more consumption... and then things stagnate until the next major innovation.

There might be a problem that it won't work this time around, as the new kinds business we're now creating have very few jobs (facebook etc). And on top of this the process of many older industries replacing their workforce with automation is increasing. So without job creation any increase in busines is likely to focus in on the owners of capital, and not be enjoyed by the rest of society. But also maybe that might not be true at all - in slow grind of recovery there's always been smart people giving convincing reasons with this time there won't be a real recovery (secular stagnation), and every time before now they've been wrong. Hell, even Keynes bought in to that. So maybe it will be wrong again, and we'll find something that will create jobs and drive up wages, same as we have every other time.


Automatically Appended Next Post:

Prestor Jon wrote:
I stand corrected. My perceptions were probably being colored by iconic fast food brands struggling, like McDonalds.

McDonalds isn't struggling because the industry is struggling, but because McDonalds core brand no longer represents what the consumer wants. Cheap and fast are no longer prioritised by the fast food consumer, who is increasingly looking to taste and healthy* food, even if it costs more or takes longer to prepare. So they're losing ground to Chipotle and the rest of the new wave of fast food.



*Well, pretend healthy in many cases, but perception is everything.

 feeder wrote:

 Frazzled wrote:
Do four or five restaurants count as a chain?

I'd say no. Four or five links is hardly a chain.

In the UK we have some micro chains, for example Giggling Squid, a Thai restaurant group owned by a husband and wife team. They have grown from one to about six locations in the Berkshire/Buckinghamshire/Oxfordshire area over the past 10 years. If the owners continue to grow, eventually it could become a major chain and then spin off into a franchise business.

Pizza Express began as a single restaurant, and look at it now.

Ok. Our favorite restaurants have about four or so locations (if by restaurant you include a movie house with an inspired menu and full bar).

My favorite location is the Dining Facility, and even the economy has hit it with the inflation bat. A perk of eating on post used to be cheap meals. We are taking $3 for a full breakfast, Now its $5. I know that is really still cheap, but seems like every time I turn around every benefit we had is increasing in cost, or decreasing in effectiveness. It has gotten to the point now that to eat all 3 meals in a dining facility is more than the cost of our daily food allowance.

 Kilkrazy wrote:

A few years earlier I had part of a fajita like object at a so-called Taco Bell in JFK Airport. It's almost certainly the worst meal-like offering I've ever had in my life. The food in Moscow and Leningrad in the late 1970s was better, seriously. (Vodka and orange, 1.5 Rubles = £1.)

We used to love Taco Bell as exchange students. It was like a 30 min drive to get to one, but it was our monthly treat. Now, I'm not saying it's in any way high quality, but sometimes you just want cheap, spicy junk.

 sebster wrote:

 Easy E wrote:
So, when will happy times return, and will it get worse before it gets better? How long can corporations sit on their piles of cash? What will it take for consumer confidence to improve? What does Uncertainty even mean in the economic sense?

Let's talk all thing economics!

People will talk about lots of things that government should do. Every single one of those suggestions will be wrong. All of them. Government is essential for stabilising or moderating the economy, but it can't create long term growth. And sure, the government can do a lot to improve equality, but that won't create long term growth (there are some people who are argue equality is good for growth, but that stuff is mostly imagination at this point).

Basically it really is a case of sitting around and waiting for productivity improvements to drive new economic activity. This has been how it's worked before now, things stagnate and then electricity replaced steam in factories and suddenly we have the ability to produce more goods at cheaper prices and that drives more jobs and higher wages and more consumption... and then things stagnate until the next major innovation.

There might be a problem that it won't work this time around, as the new kinds business we're now creating have very few jobs (facebook etc). And on top of this the process of many older industries replacing their workforce with automation is increasing. So without job creation any increase in busines is likely to focus in on the owners of capital, and not be enjoyed by the rest of society. But also maybe that might not be true at all - in slow grind of recovery there's always been smart people giving convincing reasons with this time there won't be a real recovery (secular stagnation), and every time before now they've been wrong. Hell, even Keynes bought in to that. So maybe it will be wrong again, and we'll find something that will create jobs and drive up wages, same as we have every other time.

I won't lie, I know very little on this topic.

That said, how do "boom and Bust" cycles fit into the system you describe? Are they primarily driven by Capital re-assessing the market after over-exuberance?

 Easy E wrote:
I won't lie, I know very little on this topic.

That said, how do "boom and Bust" cycles fit into the system you describe? Are they primarily driven by Capital re-assessing the market after over-exuberance?

Over-exuberance causes plenty of recession, sure. But they can also be caused by system shocks, where a key resource is suddenly unavailable or much more expensive (think of oil in 1970s). But while those kinds of recessions are the most talked about because they make for dramatic viewing, far more commonly recessions are slowly reached, after long periods of declining consumer spending and investment, that finally culminate in a period of negative growth.

One important thing to remember is that there isn't all that much of a pattern to this. Some countries have gone more than 20 years without a recession, the Netherlands once went 27 years, and Australia is just about to hit 25 years without one. Meanwhile other countries will double dip, have recession within a year or two of the last recession. Sooner or later a recession will happen, but much like rolling a double six, just because you haven't had one for a while it doesn't mean you're any more or less likely to get one on your next roll.

Thanks Sebs.

So, a lot of this is just a big Confidence Game base on consumer reactions?