Restaurant blues: Americans eating out less

More of us are making time to cook at home, and saving money is the primary motivation.

By Wall St. Cheat Sheet Jun 26, 2012 5:40PM

Image: Couple ordering meal in restaurant © NULL/CorbisWritten by Eric McWhinnie, Writer at Wall St. Cheat Sheet

Dining out is practically a national pastime for Americans. From celebrating a special occasion to simply taking a break from cooking at home, people enjoy eating out. 

But in this economy, they're eating out less -- and that may be taking a toll on some restaurant stocks. The average American spent $2,505 a year on restaurants in 2010, down from almost $2,700 in 2008, according to the U.S. Department of Labor.

That trend doesn't look to be changing. A new survey finds that Americans are still tightening their belt on restaurant spending as the economy remains sluggish.

Harris Interactive (HPOL), a market research firm in New York, polled more than 2,400 adults to gauge whether or not an economic recovery is taking place based on their eating habits. Harris found that while Americans are dining out, but they are still reducing how often they do so.

Over the past six months, 36% of respondents said they are eating less frequently at quick-service restaurants. Meanwhile, 34% of those polled said they are eating less at casual-dining restaurants. Only one in about 10 said they are eating at these types of restaurants more frequently.

"At the beginning of the economic downturn we saw consumers saving money by changing their behavior in two ways: eating out less frequently and shifting their eating-out dollars away from casual dining toward quick-service restaurants," said Mary Bouchard, vice president at Harris Interactive, in a statement.

"Now, with several years of experience with constrained budgets, they have shifted even further from the busy-lifestyle convenience of eating out on a regular basis to making time for cooking at home," she added. "When they do eat out, not surprisingly, price is still a primary component of their decision-making process."

Restaurant stocks have see mixed results this year, as the chart above shows. Casual dining outlets such as The Cheesecake Factory (CAKE) and Brinker International (EAT) have gained 2.44% and 14.5%, respectively. Meanwhile, quick-service restaurant giant McDonald’s (MCD) has declined 12% this year. Other quick-service outlets such as Yum! Brands (YUM), Jack in the Box (JACK) and Sonic (SONC) have all jumped by double digits this year.

Darden Restaurants (DRI), the world’s largest full-service restaurant company, reported fourth-quarter revenue that fell below the mean analyst estimate as customers became more selective in their dining-out choices. "From a sales perspective, growth in the fourth-quarter was below expectations, due largely to same-restaurant sales declines at both Olive Garden and Red Lobster that reflected less effective than anticipated nationally advertised promotions,” explained Clarence Otis, Darden's CEO.

Eric McWhinnie is an editor at Wall St. Cheat Sheet. As of this writing, he did not own a position in any of the aforementioned stocks.

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Jun 27, 2012 12:37PM

Well it all comes down to NO money to eat out all of the time. Many are stil unemployed and man other have given up on finding jobs. We have to spend it on increased prices of gas,  utilities,goceries, Real Estate Taxes and Insurance as well as many othrer items.

Despite the efforts of Media and Politicians to try and make us believe that all is getting better, we just do not see it. We no longer believe in or trust in what our Politicians or Media says. So much fibbing going on...

Jun 27, 2012 1:10PM
 I have tried to explain, to a few restraurant chains My rational for not going to their establishments, but no one seems to hear what I have to say, It's quite simple, put more people on the floore, open your meal hours, so people like myself and family are NOT at the mercy of a whiney teanage hostess, and don't have to wait as long as an hour just to be seated, never mind fed, It Has Been Proven that the doing more with less concept does not work, I wish Big corperations would realise this and HIRE adaquate staff to do a job correctly.
Jun 27, 2012 1:39PM
Want to know why I don't go to Red Lobster?  Because I only went there for the Alaskan King Crab.  I found that I make it MUCH better and fresher.  Olive Garden is too salty and way too expensive, and that too I can make in my kitchen MUCH better and fresher.  Not to mention MUCH cheaper.  Why give these establishments my hard earned money if I don't have to?
Jun 27, 2012 4:49PM
I refuse to pay hard earned money on overpriced pasta, overdone steaks and frozen vegtables.  Rather spend some money when I can on a nice ice cream, milk shake or a sunday
Jun 27, 2012 12:50PM
We go back to the US once or twice a year. In March we ate at one of our favorites-Olive Garden-this time in Avondale, AZ. But never again. Prices are much higher and the food quality has gone from excellent to below average. We will not eat there again. CoCos did not have Cinamon Roll French Toast in stock. Will not be back. Mimis at Metrocenter burned ou food but at least they replaced it and offered 6 big muffins.
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