(The Epoch Times)—It’s been a rocky year for the restaurant industry, with rising costs due to inflation and changing consumer habits driving a slew of chains with household names into Chapter 11 bankruptcy. According to those who follow the industry, there is no definable silver lining ahead for an industry in deep trouble.
“Most restaurants lose money, and there’s a reason for that. It’s a hard business with low margins and trends that are hard to navigate,” Jonathan Carson, the co-CEO of market strategy company Stretto, told The Epoch Times.
“When you add higher prices and a continually and increasingly overburdened consumer balance sheet, I think it makes the industry prime for restructuring,” he said.
Carson, who handles business reorganizations, said his company is aware of at least 17 national restaurant chains that have filed for bankruptcy in 2024.
Among the higher profile restaurant casualties this year which have filed for Chapter 11 bankruptcy protection this year are Roti, Buca di Beppo, Tijuana Flats, Sticky’s finger Joint, and Red Lobster.
Consumer Habits Have Changed
Laura Adams, a money expert and award-winning author who also hosts the weekly Money Girl podcast, told The Epoch Times that changes in consumer habits such as cooking at home and ordering home delivery have especially plagued the fast-casual tier of the restaurant industry.
“Consumers who dine at lower-end restaurants are the ones who will stop dining out first, and they’ll be the last ones to return because of unaffordability,” she said. “I think people have become used to ordering out, eating casually at home, and wearing casual clothes while watching Netflix.”
One of the changes in the restaurant industry that exploded during the pandemic was home-delivery services like Uber Eats, Grubhub, and DoorDash. The delivery companies, though, take large commissions from restaurants already struggling to make a profit.
Doordash orders can take as much as a 30 percent commission from restaurants.
“Doordash is a double-edged sword. It gives you the opportunity to get more food to more people, but it takes a pretty sizeable chunk off the bottom line,” said Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association.
“In third-party delivery, you have a real prisoner’s dilemma. You either shun the opportunity and limit your top-line gross sales, or you accept it and realize your ability to profit from those customers is harder than those inside your restaurant,” he told The Epoch Times.
Doordash is now the top restaurant-delivery app in the United States. At the end of 2023, DoorDash had 550,000 partner restaurants and grocery stores using its platform. However, the company is still looking for its first quarter of profitability.
In a written response to The Epoch Times, DoorDash’s corporate communications group wrote: “Our mission at DoorDash is to grow and empower local economies, and we’ve built tools that help restaurants expand their business and reach more people in their community.”
A Variety of Issues
Adams said that to survive, restaurants must offer something unique to make consumers leave their homes to experience it.
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“I think if companies can’t differentiate themselves, they’re going to have a hard time. Maybe a restaurant like Red Lobster gets transformed, but it’s sad to see such a well-known brand wither away. When you see folks cutting back on dining out, you need to offer something unique,” she said.
The reason behind many Chapter 11 restaurant-restructuring filings this year needs to be discussed more, according to Carson, who has more than 20 years of bankruptcy experience.
He believes many of the filings have much to do with getting out of rent agreements. “You can walk away from a lease with Chapter 11 bankruptcies. The company can take the liability off their PNL [profit and loss],” he said. “But you do still have some casualties along the way.”
As tough as the restaurant economic and consumer market is today, Winslow says the restaurants in his organization are still reeling from the response to the pandemic that ended two years ago.
“The long tail of COVID is still impacting this industry more than any others. We did a poll in June, and I wasn’t prepared for how severe the fallout has been, with 60 of our members losing foot traffic in the last year and only 25 seeing an increase in top-line sales,” Winslow said.
“Forty of them are currently not profitable, and two out of every five of our restaurants are at risk for closure in the near future.”
Asked if she would advise anyone to open a restaurant today in this economic environment, Adams said, “I would say it is one of the most difficult businesses you can choose to run, and I would make sure you have the expertise and a record of success before you do it.”
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
