(The Epoch Times)—It’s been a rocky year for the restaurant industry, with rising costs due to inflation and changing consumer habits driving a slew of chains with household names into Chapter 11 bankruptcy. According to those who follow the industry, there is no definable silver lining ahead for an industry in deep trouble.
“Most restaurants lose money, and there’s a reason for that. It’s a hard business with low margins and trends that are hard to navigate,” Jonathan Carson, the co-CEO of market strategy company Stretto, told The Epoch Times.
“When you add higher prices and a continually and increasingly overburdened consumer balance sheet, I think it makes the industry prime for restructuring,” he said.
Carson, who handles business reorganizations, said his company is aware of at least 17 national restaurant chains that have filed for bankruptcy in 2024.
Among the higher profile restaurant casualties this year which have filed for Chapter 11 bankruptcy protection this year are Roti, Buca di Beppo, Tijuana Flats, Sticky’s finger Joint, and Red Lobster.
Consumer Habits Have Changed
Laura Adams, a money expert and award-winning author who also hosts the weekly Money Girl podcast, told The Epoch Times that changes in consumer habits such as cooking at home and ordering home delivery have especially plagued the fast-casual tier of the restaurant industry.
“Consumers who dine at lower-end restaurants are the ones who will stop dining out first, and they’ll be the last ones to return because of unaffordability,” she said. “I think people have become used to ordering out, eating casually at home, and wearing casual clothes while watching Netflix.”
One of the changes in the restaurant industry that exploded during the pandemic was home-delivery services like Uber Eats, Grubhub, and DoorDash. The delivery companies, though, take large commissions from restaurants already struggling to make a profit.
Doordash orders can take as much as a 30 percent commission from restaurants.
“Doordash is a double-edged sword. It gives you the opportunity to get more food to more people, but it takes a pretty sizeable chunk off the bottom line,” said Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association.
- Preserve your retirement with physical precious metals. Receive your free gold guide from Genesis Precious Metals to learn how.
“In third-party delivery, you have a real prisoner’s dilemma. You either shun the opportunity and limit your top-line gross sales, or you accept it and realize your ability to profit from those customers is harder than those inside your restaurant,” he told The Epoch Times.
Doordash is now the top restaurant-delivery app in the United States. At the end of 2023, DoorDash had 550,000 partner restaurants and grocery stores using its platform. However, the company is still looking for its first quarter of profitability.
In a written response to The Epoch Times, DoorDash’s corporate communications group wrote: “Our mission at DoorDash is to grow and empower local economies, and we’ve built tools that help restaurants expand their business and reach more people in their community.”
A Variety of Issues
Adams said that to survive, restaurants must offer something unique to make consumers leave their homes to experience it.
“I think if companies can’t differentiate themselves, they’re going to have a hard time. Maybe a restaurant like Red Lobster gets transformed, but it’s sad to see such a well-known brand wither away. When you see folks cutting back on dining out, you need to offer something unique,” she said.
The reason behind many Chapter 11 restaurant-restructuring filings this year needs to be discussed more, according to Carson, who has more than 20 years of bankruptcy experience.
He believes many of the filings have much to do with getting out of rent agreements. “You can walk away from a lease with Chapter 11 bankruptcies. The company can take the liability off their PNL [profit and loss],” he said. “But you do still have some casualties along the way.”
As tough as the restaurant economic and consumer market is today, Winslow says the restaurants in his organization are still reeling from the response to the pandemic that ended two years ago.
“The long tail of COVID is still impacting this industry more than any others. We did a poll in June, and I wasn’t prepared for how severe the fallout has been, with 60 of our members losing foot traffic in the last year and only 25 seeing an increase in top-line sales,” Winslow said.
“Forty of them are currently not profitable, and two out of every five of our restaurants are at risk for closure in the near future.”
Asked if she would advise anyone to open a restaurant today in this economic environment, Adams said, “I would say it is one of the most difficult businesses you can choose to run, and I would make sure you have the expertise and a record of success before you do it.”
It’s becoming increasingly clear that fiat currencies across the globe, including the U.S. Dollar, are under attack. Paper money is losing its value, translating into insane inflation and less value in our life’s savings.
Genesis Gold Group believes physical precious metals are an amazing option for those seeking to move their wealth or retirement to higher ground. Whether Central Bank Digital Currencies replace current fiat currencies or not, precious metals are poised to retain or even increase in value. This is why central banks and mega-asset managers like BlackRock are moving much of their holdings to precious metals.
As a Christian company, Genesis Gold Group has maintained a perfect 5 out of 5 rating with the Better Business Bureau. Their faith-driven values allow them to help Americans protect their life’s savings without the gimmicks used by most precious metals companies. Reach out to them today to see how they can streamline the rollover or transfer of your current and previous retirement accounts.
Biden-Harris Price Controls Causing Senior Drug Prices to Skyrocket
by American Greatness
If there’s one axiom, we all know about Washington, D.C., is that it’s full of well-intentioned policies and unintended (read: harmful) consequences. A recent reminder of unintended policy consequences is the so-called Inflation Reduction Act (IRA). The IRA was passed in August 2022, and according to its champions in Congress…
Carney on ‘Kudlow’: The Fed Tied Its Own Hands With Rate Cut Decision
by Breitbart
On Wednesday’s broadcast of the Fox Business Network’s “Kudlow,” Breitbart News economics editor John Carney stated that the Federal Reserve should have waited until after the election to make rate cuts and that by announcing a cut of 50 basis points now, the Federal Reserve has locked itself into doing…
Leftists Deserve the J6 Treatment
by J.B. Shurk
Remember: illegally appointed special counsel Jack Smith is prosecuting President Trump in D.C. for exercising his constitutional right to free speech after the 2020 election. Smith’s case essentially claims that Trump was not entitled to question the legitimacy of the mail-in ballot–tainted election and that his refusal to concede to Joe Biden…
CEOs Scale Back Hiring Plans Amid Weaker Sales Projections, Cooling Economy
by The Epoch Times
America’s corporate leaders plan to pull back on hiring over the next six months and expect a slowdown in sales, according to a survey of CEOs, which comes as cooling in the jobs market has prompted the Federal Reserve to deliver a significant 50 basis-point rate cut. The Business Roundtable’s…
Special:
Stock up on long-term storage steak with 25-year shelf-life and take advantage of 35% off with promo code “freedom35” – this week only. Visit Prepper All-Naturals and secure your family’s future with freeze dried Ribeye, NY Strip, Tenderloin, and more.
SAVE Act Paired With Spending Package Fails to Pass House
by The Post Millennial
On Wednesday, the SAVE Act, paired with a stopgap government funding package, was voted down with 202 yeas and 220 nays. This comes as illegal immigration and border security combined with concerns over voter fraud have been raised in the country. The Safeguard American Voter Eligibility (SAVE) Act paired with…
Top 5 Prepping Myths Debunked
by Natural News
Preppers don’t always have a good reputation. In fact, non-preppers might even think preppers are paranoid hoarders or gun-crazy hermits. But that’s the furthest thing from the truth. In reality, preparedness is about making sure your family is safe during emergencies. It’s also focused on self-sufficiency. Below are common myths…
Less Than 50 Days Until Life in America Changes Forever, and Our Nation Is Primed for Massive Civil Unrest
by Michael Snyder
(The Economic Collapse Blog)—Years of extremely inflammatory rhetoric from the mainstream media and from many of our leaders have brought us to the brink of a societal nightmare. The numbers that I am about to share with you are horrifying, but it is so important for us to understand what…
Car Insurance up a Whopping 55% in Biden-Harris Admin’s America
by Breitbart
Car insurance rates have skyrocketed under the leadership of President Joe Biden and Vice President Kamala Harris, and Americans are feeling the squeeze. Data from the Bureau of Labor Statistics show that car insurance prices rose 55 percent from January 2021 — when Biden and Harris first took office —…
Americans Concerned About Retirement Should Work With This Christian Gold Company… Even if They’re Not Christians
by Sponsored Post
It isn’t difficult for Christians to embrace the tenets of the Bible. Contrary to popular belief, a Biblical worldview is not restrictive. It is empowering. It is not boring. It is thrilling. The only thing that makes it challenging is our nature as flawed humans, but we should strive to obey what Jesus Christ told us in Matthew 22:37-40 …
The Secret Service Has a $3B Budget. It Doesn’t Need More Money.
by Frontpage Mag
The usual D.C. response to government failures is to call for more money. This time it’s for the Secret Service. There’s now a back-and-forth between congressional Republicans and Democrats over Secret Service funding. The Dems and the media are playing the usual Catch-22 game. Either Republicans increase spending or the…
Economist Group Has 45 DEI Panels, Refuses One on Hayek
by The College Fix
The American Economic Association found space for at least 45 panels on DEI at its upcoming conference – but had no room for a discussion about economist Friedrich Hayek. Chapman University Professor Mark Skousen revealed how he wanted to organize a discussion about Hayek, a Nobel Prize-winning libertarian economist famous…
Oracle Founder Larry Ellison Imagines a Dystopian Future of Constant AI-Powered Surveillance to Enforce “Best Behavior”
by Didi Rankovic, Reclaim The Net
(Reclaim The Net)—Larry Ellison, co-founder, chairman of the board, and chief technical officer of Oracle, has revealed where he sees the world going in one particular aspect – continuous, real-time control of people. It is a dark place of “AI” (machine learning, ML) mass surveillance, which Ellison wants to make…
Tim Walz Stumped By Question on Inflation; Repeats Lie About Trump ‘Sales Tax’
by Breitbart
Minnesota Gov. Tim Walz, the Democratic nominee for vice president, was stumped Tuesday when asked by a reporter to explain what he and Vice President Kamala Harris would do for families struggling financially. In an interview with local Macon, Georgia, CBS affiliate WMAZ, Walz first said that he and Harris…
Shocking Number of Democrats Say America Would Be “Better Off” if Trump Had Been Killed
by Rob Bluey
(The Daily Signal)—More than 1 in 4 Democrats believe America would be better off if former President Donald Trump had been assassinated, according to a poll released Wednesday. Veteran pollster Scott Rasmussen‘s national survey of 1,000 registered voters, conducted by RMG Research for the Napolitan News Service, asked Americans about…
Kamala Harris Says She is Open to Slavery Reparations and Won’t Discount ‘Executive Action’ (VIDEO)
by The Gateway Pundit
Vice-president Kamala Harris has signalled her openness to the idea of reparations for black people, saying she would not rule out executive action if she wins the White House in November. Speaking to the National Association of Black Journalists on Tuesday, Harris was asked about her position on the issue,…