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Deep Dive: Fear a restaurant recession? Here’s more evidence

Times are tough for the restaurant industry, and even many of the best chains are suffering from rising overhead costs.

The use of the frightening words “restaurant recession” started to spread in July after Stifel Nicolaus analyst Paul Westra downgraded 11 restaurant stocks, while saying a deceleration of sales growth, along with rising expenses, was setting up a grim period for the industry.

Westra also said an economic recession in the U.S. in 2017 could be the “worst ever” for restaurants, because the likelihood of minimum-wage increases would take away the industry’s usual post-recession labor-cost decline.

There aren’t any strong signs of a recession in the works, with the economy continuing to expand slowly and adding 255,000 jobs in July, in nearly every broad category.

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