Consumers will use much of their tax rebate money to pay for increasingly expensive gas and groceries, rather than spend it on electronics or clothes, said the most recent survey by the National Retail Federation. This according to a recent Reuters news feed.
I believe now that we have yet to really see what this economic slowdown will really look like and I feel that the worse is still yet to come. How much higher will gas get? I certainly don’t see any slowdown in food costs. You have got to believe that all of this will adversely effect the restaurant industry. With many households feeling the pinch, we can expect that the hardest hit segment will be casual dining and the fine dining segments. I wouldn’t be surprised if the “recession-proof” QSR segment feels a bit of a squeeze as well. Yes, QSR has the advantage of lower price points and day part -lunch – that is one that most of those working will go for that fast food fix. But I would gather that many more folks will consider brown bagging it a couple more times a week to help save a few bucks.
I mentioned a lot of this in my 2008 predictions for the restaurant industry -(Read the entire 2008 Restaurant Predictions).
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