Sagging Economy Is Challenging Restaurants

 It could be 12 to 24 months after the economy begins a revival before restaurants see business getting back to normal.
   That's the prediction of Lynne Collier, a restaurant analyst at KeyBanc.

   She's quoted in "USA Today" as saying for the foreseeable future restaurant stocks will continue to sink.
   Eateries are facing a couple of major issues.

   The first and most obvious is people fearing they may not have a job next week who've decided a night out at the local Ruth's Chris Steak House is no longer in the budget.

   Ruth's Hospitality, the company that owns the steak houses along with IHOP and Applebee's has watched stocks fall nearly 90-percent which is the second problem.

   Standard & Poors is reporting 20 members of the retail and restaurant industry classification are dangerously close to not meeting interest payments on their corporate debt.

    One bright light in the restaurant industry is the fast food business.

   McDonald's for instance has seen a more than five-percent bump in earnings during January at locations open at least a year.

   Collier says restaurants will turn around eventually.

   That will happen, she says, when consumers feel more confident that they'll be able to keep their jobs.


   (Copyright 2009 by Newsroom Solutions)