The restaurant recession has arrived:
MARKET WATCH:
Restaurant companies should brace for a challenging period as consumers grapple with the rising costs of rent, prescriptions and car loans and take advantage of cheaper groceries to eat at home more.
That’s the verdict of Moody’s Investors Service, which on Tuesday slashed its operating-profit growth forecast for the restaurant sector and revised its outlook to stable from positive. The ratings agency is now expecting operating profit to grow 2% to 4% in the next 12 to 18 months, down from a previous forecast of growth of 5% to 6%.
“Consumers are wrestling with higher nondiscretionary spending needs, while restaurant companies face higher operating costs, predominantly labor and challenged traffic trends,” Moody’s analyst Bill Fahy wrote in a note.
I can personally attest to the facts and assumptions within this article.. not only have I cut back spending a bit but people I know who run restaurants or work within them also speak of much less customers now than one year ago when both time frames are compared..
