The Restaurant Business is Booming

HappyHarry said: "Americans eat out more than ever before. What can we learn from the restaurant business? In the last 20 years people have increased the amount of times they eat over 500%. How can this success translate into other industries?"

AlfredSokol said: "In order for people to eat out more their marketing to had change the fundamental way people behaved. They used a lot of promotions over the years to make it more cost effective. Plus they target the business crowd quite heavily."

misterjover said: "I worked in restaurants in the past, and I can honestly tell you that profit margins in most restaurants are pretty slim. The only restaurant stock that I'm favoring is DNYY (DNYY.OB)"

AlfredSokol said: "What can a company do to cut costs in that business?"

misterjover said: "[QUOTE=AlfredSokol]What can a company do to cut costs in that business?[/QUOTE] Alfred That's a good question. Allow me to reveal the dark secrets of the restaurant industry. This is why I chose to leave all conventional means of earning income by starting a small corporation with my best friend. When I was managing a franchise (which for my personal protection will remain undisclosed) my general manager would cut all sorts of corners to cut costs. He would instruct the cooks to change the date-documents on the frozen meat so that instead of throwing away unused and expired food, they would feed it to unknowing customers. Also, he made the servers consolidate all the ketchup and hot sauce from old bottles so that the existing bottles on the tables were always filled. This scalped a few pennies off the costs of throwing away 1/10-filled bottles, but the mixture of old and new sauces only contributed to the growth of bacteria and other health risks. Furthermore, cooks were strickly instructed to serve smaller portions of certain types of food that were costly (steaks, shrimp, seafood, etc.), and servers were required to charge ridiculous amounts of money for simple additions such as cheese, mushrooms, or strawberry topping. Stay away from the restaurant business if you like keeping your soul. :)"

HappyHarry said: "Truly disgusting. Visions of Tyler Durden spring to mind. I think restaurant marketers have made America fat. I expect a lot of payouts over the years."

Heather said: "Yuck. I was thinking of eating out tommorrow night, maybe not now. I'm sure it is probably true that alcohol makes a lot of a restaurants bottom line. I invested in JAX once, and sold it because it didn't have much movement. It is currently selling at 7.33, about a dollar more than what I bought it at. CAKE is opening a new store here sometime soon.."

AlfredSokol said: "I always figured it was bad, but that post confirms it. Every now an again I'll get really sick after I eat out. I wonder why?"

ToastMonger said: "There are a couple of restaurants that I would be willing to buy stock in. One is the company that owns both Olive Garden and Red Lobgster. Those are both solid middle-class restaurants, and they have been around long enough to know that they are not just fads like Rainforest Cafe or the like. I personally spend quite a bit of money at those two restaurants and almost every time I go I end up having to wait. Unfortunately, I don't remember the name of the company that owns it. Another place that I would like to get is Chick-Fil-A. Unfortunately for us Chick-Fil-A is a privately held company, but if they ever IPO this is a stock to buy. Chick-Fil-A makes great food and it is consistently crowded. Also, they have some of the best PR of any company that I have ever seen. One of the big things that Chick-fil-A is known for is being closed on Sundays. Even though they lose quite a bit of money on sales on sunday they make it up by the great publicity they pick up from appearing "family friendly""

HappyHarry said: "I also think [url=http://finance.yahoo.com/q/pr?s=EAT]Brinkers - EAT[/url] is a very good operator. The run both Macaroni Grill and Chili's which do quite well. I also agree Darden's [url=http://finance.yahoo.com/q?s=DRI&d=t]DRI[/url] is worth a look. Olive Garden's are ALWAYS packed and so are most Red Lobster's. They sell for around a 19 P/E, so not too inflated."