What do you plan to do with your economic stimulus funds? Will you celebrate over food? Use it to stock your pantry to supplement a few lean months? Let us know at firstname.lastname@example.org or by commenting below.
If you’ve turned on the television or radio, picked up a newspaper or magazine, or logged on to the Internet in recent months (and you obviously have), you’ve heard about the looming economic crisis.
Presidential candidates and pundits, bartenders and bakers, even the cashiers at the convenience stores are all talking about the same thing: are we headed into a recession . . . or even a depression? And, what does that mean to your food bill and habits?
Restaurants are cautiously optimistic that we will continue to eat out. Here are some of the things that are causing concern:
- Rising fuel costs are eating into consumers’ budgets in obvious and hidden ways. Sure we are obviously paying more at the pump, but so are all the suppliers that deliver goods to retail outlets everywhere.
- Rising oil prices have a double effect. As the government subsidizes farmers who plant corn for ethanol, less land is available to produce corn for animals to eat. So if it costs more to feed them, it costs us more to eat them.
- Although food is a necessity, we will be choosing between restaurants and home cooking. We all have less disposable income, at least psychologically, than we did last year.
- More quick dining options available in grocery stores make it easier to create homemade-ish meals without all the work. Grocery stores are expanding their ready-made options. Grocery store food prices have risen as much as 17% by some estimates, but it’s often still cheaper than eating in a restaurant.
To meet the concerns, restaurants are employing a variety of ideas – and these can benefit us as consumers:
- Diversification. For example, Darden Restaurants, which operates Olive Garden, Red Lobster, Bahama Breeze, and Seasons 52, is focused on diversification, with most of its growth coming from its new chain, Seasons 52. This may mean new opportunities and special promotions geared to get us to visit.
- Slower expansions. Starbucks is curbing domestic expansion plans and closing at least 100 underperforming stores. It’s also made a huge investment in retraining staff to focus on the experience of visiting its stores. And, Gourmet Burger Kitchen in the UK is slowing its expansion plans. The actual focus may be on quality, a nice benefit for the consumer.
- Loyalty programs. Some brands are looking to make a price-value connection more solid in the minds of their consumers, offering combos and loyalty programs. Frequent buyers may actually come out ahead.
The coming economic stimulus package, realized in the form of rebate checks issued to consumers from the government, is being watched closely to see how it helps. John Gay, Senior Vice President of Government Affairs and Public Policy for the National Restaurant Association says, “This measure promises to be good for the restaurant industry as we have seen a boost in restaurant spending when consumers receive rebates such as this from the government.”
So, we return to the question we asked at the beginng: What do you plan to do with your economic stimulus funds? Let us know at email@example.com or by commenting below.
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