The New York Times reports on how “the glut of restaurants has increased the pressure on individual restaurant owners. Industry sales are up nationally, but growth has slowed to the lowest rate since 2010.”
Here’s where many place the blame, according to the Times:
“Since the early 2000s, banks, private equity firms and other financial institutions have poured billions into the restaurant industry as they sought out more tangible enterprises than the dot-com start-ups that were going belly-up. There are now more than 620,000 eating and drinking places in the United States, according to the Bureau of Labor Statistics, and the number of restaurants is growing at about twice the rate of the population.”
Indeed, while “customers continue to spend a large share of their food budget in restaurants” - as much as 44 cents of every food dollar, on average - the Times notes that “they’re spreading the money across a larger number of establishments, so profits are split into smaller individual pieces. Yet the industry — particularly chain restaurants — continues to expand, a strategy that both masks the problem and makes it likely that more places will falter.”
Here’s where many place the blame, according to the Times:
“Since the early 2000s, banks, private equity firms and other financial institutions have poured billions into the restaurant industry as they sought out more tangible enterprises than the dot-com start-ups that were going belly-up. There are now more than 620,000 eating and drinking places in the United States, according to the Bureau of Labor Statistics, and the number of restaurants is growing at about twice the rate of the population.”
Indeed, while “customers continue to spend a large share of their food budget in restaurants” - as much as 44 cents of every food dollar, on average - the Times notes that “they’re spreading the money across a larger number of establishments, so profits are split into smaller individual pieces. Yet the industry — particularly chain restaurants — continues to expand, a strategy that both masks the problem and makes it likely that more places will falter.”
- KC's View:
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Not to oversimplify the problem - and let’s face it, there are way too many crappy restaurants out there - but this is what happens when the focus is more on Wall Street than Main Street. Disaster almost is inevitable.
