November 18, 2009

Written by: Vince McConeghy

There is such little good macro news about the industry, I started to catch myself wondering: What in the blazes is going on? I have a new theory and it's sitting, bolt upright in your living room.

Is This Machine Killing Business?

David Farkas dispatches an ominous post in Chain Leader yesterday about structural changes in the food service industry.  He quotes industry analyst Jeffrey Bernstein's recent synopsis of industry conditions: People are staying home because there is meaningful deflation in food prices, increase in restaurant-quality take out at supermarkets, and no pent up demand for restaurant meal consumption.

I call bullshit on Bernstein and Farkas.

People are staying home at night because they now have high definition, flat screen TVs. If this seems a little far fetched, look at Hollywood's strategy in regards to delivering first run features directly to homes and by- passing theatres. The operative justification is convenience.  This is something the food service industry ponders daily: How can I make my operation more convenient to the consumer?

These are scary, scary times and people will protect the home front at all costs, meaning mortgage first. The palpable anxiety about the economic direction of our country gnaws at the very fundamental hunger triggers of our psyche.  Stay home in our caves, heat up ramen noodles and watch the Los Angeles Clippers on TNT.