Restaurant blues: Americans eating out less
More of us are making time to cook at home, and saving money is the primary motivation.
Written 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.
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...
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