When life gets expensive people stop going to Outback. I think Confucius said that.
Add the political pressure to raise minimum wages and things don’t look so good for restaurants right now.
One factor is pressure on discretionary income from the rising costs of staples such as rent, medicine and education. Then there’s the steady rise in the cost of eating out, which has come just as grocery bills are getting cheaper. The cost of food purchased for home use—that is, groceries—has fallen 2.4% in the past year, government data showed in October. That’s the biggest decline over a 12-month period since the end of the Great Recession in 2009, as MarketWatch’s Jeffry Bartashreported.
Food costs have shrunk because of a global glut in farm products such as wheat, rice, soy and corn. Then there’s the effect of U.S. producers increasing the size of egg-laying chicken flocks and cattle herds, which has helped bring down the cost of eggs, beef and milk—egg prices alone have tumbled a staggering 50% in the last year.
At the same time, the cost of food away from home—takeout dinners and restaurant meals—climbed 2.4% in September from the year-earlier period.