Recession Might Mean Lots of Shuttered Restaurants
Today's South Florida Business Journal has a good story on how the sputtering economy is affecting the restaurant industry; it's worth reading if you've got a few minutes. Restaurateurs, like everyone else, are taking a hit, and it all goes back to the housing market (doesn't everything?):
And the slump at the dining table is also starting to take a bite out of state coffers at a time when lawmakers face huge budget cuts due to the housing bust.According to the article, if you're a restaurateur, your best bet is apparently to own a gourmet pizza shop or an upscale sports bar, both of which seem to hold up well despite recessions. Or a fast-casual eatery. Think hot dogs. According to one restaurant broker, high-end steakhouses and low-end casual places are doing well, and the middle is getting hurt most.Sales tax revenue collected on restaurants, bars, motels and entertainment activities is declining, according to Amy Baker, chief economist for the state House and Senate. "By the time we finish our estimates [for the year], we could probably be below last year's level. We believe that although it isn't officially called a recession yet, we will be in one. That affects all the other industries."
She said the real estate downturn is now leaking into other sectors.
"For most people, their home is their biggest asset, and when the market was doing well, people spent more and ate out more," Baker said. "When the housing market came out of the bubble and the national economy took a downturn, they didn't feel as wealthy and weren't as confident in spending."
Baker said she expects sales tax collections to fall even further.
This basically means that mediocre and bad restaurants are going to get weeded out. Is this a bad thing? Not necessarily. The good ones should be able to ride out the storm.
Restaurants starved for customers [South Florida Business Journal]
