Restaurant Business Markets Report

Well hello everyone it's been a while since I've started a thread on some economic subject and this one is as good as any as it affects refer OTR drivers and food service truckers and warehouse workers.

Well because I used to be in the pizza shop and at one point in time almost owned my own pizza shop on Pleasant Valley Drive in Parma, Ohio I get PMQ which is Pizza Monthly and Quarterly magazine piped in. Well they blast my inbox with stuff and usually I ignore them, but they had an article about restaurant chains in a shake out.

They said the outlook for Chain Restaurants and IFS's (Independent Food Service Providers) (That's cool industry lingo) has been on the decline.

They said and this affects all you Sygma drivers out there, that Ruby Tuesday's is slated to shut down 100 restaurants, I know Bennegan's went under sometime ago.

Bob Evan's (GFS's largest customer on the chain side) closed down 27 restaurants in April and 20 last year. So there up to 47 restaurants shut down. I guess you figure you get into any organization as big as Bob Evan's or Ruby Tuesday's your going to have a couple places that don't pan out.

However the market is sighting that, it's not just a matter of places not panning out it's a matter of this darn obnoxious millennial generation which has been a huge problem there's a bunch of them, but there awful fickle one minute they say they want carbon free tofu and that's what they care about, but seem to never order the carbon free tofu.

Anyhow the report has said that to summarize there has been an out pace meaning there are more restaurants then there is a demand for.Plus millennial's like my self like to cook (I have a good example of that)
Anyhow they said grocery store food is fairly cheap in comparison to eating at restaurants so what's happening is people are opting to stay home and cook.

The article sighted that basically the landscape is over saturated with chain restaurants and independents have also had kind of a difficult time as well because of changing demographics so laws of supply and demand say there's to much supply and not enough demand restaurant chains actually out paced US population growth and now there's an over saturation in the market so a correction is now taking place.

 

Really the problem with the restaurant industry and it's really why I my self do not support them that much either is because they are of no value. The Independent take out and delivery pizza shop is one thing, but as far as chains and even local chains like Aladdin's here in Cleveland. A lot of the places are of no value.

I'm not going to buy a hamburger from the local bar for $15.00 and get one meal out of it, vs going to the GFS store using my employee discount getting some buns and cheese and other ingredients and our hamburgers and cooking them my self especially if you have a family you go out to eat you spend $100.00 for one meal. You go to the grocery store and cook your self that same $100.00 can stretch two-three meals, plus you have residuals. Yesterday I made pizza at home I did end up spending $50.00 at the grocery store, but I've got cheese now for next time and any other thing I might want to make and also other ingreidents that I won't have to buy next time and diner and lunch or what ever for the entire weekend, vs going out to eat $50.00 would get you maybe two meals.

Last Friday a co-worker and I went to the bar across the street from our yard I had a burger and he had an italian sandwhich and we split an appetizer platter both of us combine it cost $50.00.

I like to eat, but I wouldn't say food is a vice of mine either because when I am hungry I like to eat and dream up things to cook, but when I am not hungry I won't have anything or even dream up things to cook.

I laugh to I heard Taco Bell (Yum Brands) wants to expand so they can reach the $15billion dollars in sales mark over the next couple years yet, I can think of a couple Taco Bell locations here in Cleveland, that never made it.

And another thing and this is another fad/bubble that will eventually burst I know it will it has to however I don't follow or care much about the alcoholic beverage industry, I've worked in that industry for different sectors of it and I've had more then my fare share of the alcoholic beverage industry I left that business and have never looked back, but now a days there are like what 8 kajillion micro-brews and craft breweries and we have so many micro-brews and craft breweries here in Cleveland it's getting to the point of absurdity some of them are even big enough to where they have out grown self distribution, while others are still small enough to where they are able to self distribute.

I can't believe that, the bubble won't burst on the micro brews. Obviously the big ones like Great Lakes and others will still be around, but I can't believe that all these small time micro brews will make it, gosh darn with the IFS's in the toilet and chains closing up shelf space in stores and stuff and plus over all manufacturing and distribution capacity of some of these places there is no way all these micro brews can make it.

Lets figure chain restaurants they have some alcoholic offerings, but they don't have every microw brew under the sun, and to get into a chain restaurant as a micro brew you got to climb the ladder so if your a micro brew and you have self distribution it would be difficult to reach your entire potential customer base, and even if you did so what, unless you have the marketing budget to run around and create "buzz" which would be hard to fully do, especially if your some small time outfit with a shrinking restaurant market that right now is in contraction and all the other factors I can't believe all these micro brews are going to make it and when I say make it I wonder what all these micro brews goals are? Are they set up to run long term or I just have to wonder if maybe the entrepenuers who started these business figure okay lets shell out the 2million bucks or whatever it costs might be more might be less I don't know, figure maybe we come strong out of the gate and do 2million a year in sales and figure get 10% of that as profit and try to grow the business year after year till we hit our glass ceiling where were at peak production and then by that time the micro brew fad or craze will be over and will shut it down sell off the brand to a bigger company or just take the money sell the assets and walk away.

It's like on west 25th street in Cleveland all those fancy bars and restaurants and stuff there all on a business cycle every 5-10 years they change names and ownerships this decade there that next decade there this. Night Clubs and stuff all have a shelf life and I have to believe that chain restaurant concepts are the same they all have a shelf life and like Max and Erma's (another place I never go to) didn't they close a bunch of places down or way downsize?

I know there are some places like Texas Road House that kill it and do a heck of a business, however Texas Road House isn't like Appleebee's where there's one on every corner.