Friday, April 25, 2008

Spike in Food Prices Taking a Toll on Restaurant Industry

The cost of eggs, cheese, wheat, and (most recently in the news) rice is going up and up. The effect is taking a toll on the restaurant industry, where profits are being squeezed at a time when middle-class America is cutting back on dining out. The fast food eateries are holding up better, since many people who had been frequenting mid-priced chains are now going to fast food. But for mid and high price restaurants, the hurt is on.

Looking in iMiners press release database we can see the recent news being put out by companies in the Retail-Eating Places industry. Companies like Yum Brands and CEC Entertainment (Chuck E. Cheese) are holding up well. Mid-priced eateries like Ruby Tuesday are not (see stock chart for CEC: vs. stock chart for Ruth's Chris:
Even Starbucks is getting hammered as more people make their coffee at home rather than paying $3.50 for a latte. See Starbucks 90 day chart:

Where will it take us? Follow the news and find out...

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