Restaurant Industry Traffic, McDonald's, Chipotle, Starbucks & More
Something seems to have changed the restaurant industry after covid in a permanent way. Nobody is attempting to explain the secular shift that has led to a material traffic decline across all restaurant categories. Let’s get the discussion started…
According to CAZ Investment’s 2Q report: “There appears to be a widely held belief that interest rates coming down will heal all wounds and these issues will go away in short order. Make no mistake, rates coming down is definitely helpful but not every problem is a debt service or valuation metric problem. Some problems are just… problems. Supply and demand still matter, small business creation still matters, the regulatory environment still matters, and consumer demand still matters. All these factors have a major impact on the creation of jobs and wage growth, which are the overwhelming drivers of our economy.”
On balance, economic activity has little changed in nearly all Districts since early September, though 2 Districts reported modest growth. The short-lived dockworkers strike caused only minor temporary disruptions. Hurricane damage impacted crops and prompted pauses in business activity & tourism in the Southeast. Despite elevated uncertainty, contacts were somewhat more optimistic about the longer-term outlook.
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Principal at Pacific Management Consulting Group, Restaurant Analyst and Management Consultant
3 周Thank you, Wally. I will start with point one. The industry is still opening too many #restaurants live on depreciation cash flow and too much debt.