No. of Recommendations: 6
Restaurant chains also shrank last year. Institutions like Red Lobster and TGI Fridays filed for bankruptcy and Denny’s and Applebee’s announced major closings.
As someone who has eaten out way too often in his life I always wondered how a lot of the marginal quality chains stayed in business. My limited experiences with places like TGI Friday's, Applebee's, Chili's, etc. are that they aren't cheap but the quality is marginal at best. On the lower end I'd rather go to better fast food places such as Chick Fil A, Culvers, In-n-Out, etc. And chain wise places like Outback and Cheesecake Factory provide better quality food and service, at least in locations I've been to.
I've never been much of a shopper. As a single guy I was a 15 item or less person who avoided crowds as much as possible but I always had a fond spot for Big Lots. The couple of locations I've been to in Scottsdale, Glendale, AZ and in Maryland all were decent with reasonable service (again I avoided rush times). I'll miss that. Now that I'm retired and tend to get up early, I've gotten over my dislike of Walmart and we go there at times to pick up a few items while most people are sleeping or at work (7-8am).
I'd be more curious in terms of seeing store closings as a percent of total stores around.
No. of Recommendations: 10
As someone who has eaten out way too often in his life I always wondered how a lot of the marginal quality chains stayed in business.
Perceived cheap food and no dishes to wash. That was the instant allure of fast food, along with, uh, “fast”, and the restaurant industry went downscale in a hurry. To that point there were only a couple of mid-price options, notably Howard Johnsons and a couple others. So you had a bifurcated marketplace with expensive-ish full service restaurants at the high end and McDonald’s and Kentucky Fried Chicken (et al) at the other.
The mid-price tier opened up with all those options you mention: Fridays, Applebees, Chilis, etc. But with the inflation-reset even those now appear expensive, at least to the middle-income patron who has yet to catch up in wage earnings. And since perception always lags reality, it may be a few years before a $15 entree is seen as “normal” when it used to be $9.99.
So as that middle tier customer is hurting (see: election of a known rapist who promised to bring down prices) those businesses that serve that segment will be hurting. How long they can last is a good question, which is why I steer clear of food service at all (as an investment, I still patronize as a customer.)
There will be other failures, even of those who serve the “cheap” end, like Big Lots. Those are probably more management and location failures (or capitalization or whatever), and I would put Kohl’s on that watchlist: it’s a mid-price Department Store, being squeezed at the bottom by WalMart & Target, and the upper end who still has the money to go to Macy’s (not that they’re without problems either.)
Finally, I’ll just note that we are the most over-retailed country in the world, with more than TWICE the number of outlets as the next closest entrant on a per-capita sales/spending basis. I’ve been expecting a shakeout for several years, but they keep adding more strip malls and more stand-alone and here comes another “outlet” mall, so what do I know?
