I continue to believe that the casual dining industry is not out of the woods yet from a demand perspective and that 4Q comparisons might not be as easy as they look.
The Federal Reserve reported Tuesday that consumers ratcheted back their credit by a larger-than-anticipated $21.6 billion from June, the most on records dating to 1943. Economists expected credit to drop by $4 billion. Clearly consumers are spending less and some could argue that banks are cutting back on lending. Either way, lees credit available suggests a lower level of spending overall. For most Full Service restaurants, 70-80% of transactions are done using a credit card. The less credit available, the less money there is to spend on discretionary items like eating out.
This chart clearly tells that story!
