Cash-strapped consumers are getting reacquainted with cooking at home, and that's been bad news for restaurants and their stocks

 

In some places, restaurants might be packed, but you have to look at the time this happens, usually during lunch breaks during the day or around dinner time during weekends. But what about the other times during opening hours? They probably are slow. Also, the foods people are now ordering are the cheaper stuff on the menu and also people are skipping on appetizers and drinks which are the biggest profit centers for restaurants.

 

While some individual restaurant locations may be packed, many locations are closing or losing money due to smaller crowds.

This is an industry that is a mix of large chains, small chains, and independent, locally owned restaurants. And, outside the restaurant industry are the hundreds of companies that supply restaurants.

Know that it employees about 13 million people or 9% of the US workforce. It is one of the largest employers outside government. In addition, every dollar spent by consumers in restaurants generates an additional $2.02 spent in our nation’s economy. The industry is expected to contract around 5% in 2009. As you can see, this is an effect that will ripple throughout the economy.

Shares of restaurant stocks are suffering as consumers cut back on dining out:

Company

Symbol

Stock price Friday

Change from 52-week high

Year-to-date change

Wendy's/Arby's

WEN

$4.86

-16.9%

-1.6%

McDonald's

MCD

$54.57

-18.6%

-12.3%

BJ's Restaurants

BJRI

$11.99

-24.9%

11.3%

McCormick & Co.

MKC

$30.15

-28.3%

-5.4%

Panera Bread

PNRA

$46.28

-28.8%

-11.4%

Texas Roadhouse

TXRH

$8.45

-30.2%

9.0%

Buffalo Wild Wings

BWLD

$31.24

-30.5%

21.8%

Papa John's International

PZZA

$21.19

-30.9%

15.0%

Jack in the Box

JACK

$20.48

-32.5%

-7.3%

Steak n Shake

SNS

$6.31

-33.2%

6.1%

CEC Entertainment

CEC

$25.33

-36.0%

4.5%

California Pizza Kitchen

CPKI

$10.66

-37.0%

-0.6%

PF Chang's China Bistro

PFCB

$19.30

-41.5%

-7.8%

Starbucks

SBUX

$9.58

-50.4%

1.3%

CKE Restaurants

CKR

$7.06

-51.1%

-18.7%

Chipotle Mexican Grill

CMG

$55.50

-54.2%

-10.5%

Brinker International

EAT

$10.89

-54.4%

3.3%

Sonic

SONC

$9.22

-60.5%

-24.2%

The Cheesecake Factory

CAKE

$8.09

-65.2%

-19.9%

Red Robin Gourmet Burgers

RRGB

$14.67

-66.3%

-12.8%

Landry's Restaurants

LNY

$5.70

-72.6%

-50.9%

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