Many Americans seem to have lost their appetite for eating out.
This is a rather abrupt shift from recent years, when many people were spending more money at restaurants and less money at the grocery store.
Analysts are now warning that a restaurant downturn is imminent. For example, Bloomberg reports that Stifel Financial Corp. analyst Paul Westra says this is the “start of a U.S. restaurant recession.” He has a “bearish outlook for restaurants” and says restaurants should brace themselves for what’s to come.
This begs the question: Why have so many Americans’ tastes changed from dining out to home cooking?
According to CNN Money, some in the restaurant industry say it all comes down to money.
“It’s gotten a lot cheaper…to get fresh beef at your local butcher and go home and grill it,” Wendy’s executives said during a conference call with analysts.
Wendy’s sales grew a dismal 0.4 percent in the past three months. Meanwhile, Starbucks, McDonald’s, Taco Bell and Chipotle all missed recent sales projections, Grub Street reports.
Diners are likely to see higher prices on restaurant menus these days. It’s often the result of restaurants bumping their workers’ pay due to increased minimum wage laws or an effort to better compete for workers in a tight job market, says CNN Money.
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