The Restaurant Sector 2010, and the reality of inflation


When we read the Wall Street Journal, New York Times, The Economist, Bloomberg Business News, Business Week, Forbes, investor Business Daily, Financial Times, and even Beige Report from the Fed tells us with graphs, charts and photos to it deflation in the United States, not inflation. However, if you factor in certain sectors of our economy, you can see that there is quite a bit of inflation in many places -. Eg food at the grocery

Even though Wal-Mart sales prices on certain items like catsup for dollars, a 2-liter bottle of soda for $ 0.88, or cereal for $ 0.25 per cob, it does not mean we do not have inflation in the food sector of our economy. We really do, and we may witness higher price of wheat worldwide is used for many products, and the price of feed increases, prices for meat. And speaking of meat, this is where the “rubber meets the road” for the restaurant industry.

As the economy decides whether it is going to slip back into a double dip recession or not, many companies are not rehiring, but they are getting ready just in case. That is to say that they are reducing their labor force and lower prices as a hedging strategy against future economic function. The low-cost high-volume strategy is common during recessions, and that would include the restaurant industry. So on the one hand the restaurant sector in 2010 will give Offers bring in visitors to their eateries, yet on the other hand the cost of food will increase, due to inflation.

This is the Catch-22 and it does not bode well for those who are unemployed who may work in the restaurant sector or for equity and quarterly profits of the largest restaurant chain. And even mom and pops restaurants, this great family-owned restaurants with great food in the local neighborhood and the community will also suffer. Their costs rise even more than large, which can take advantage of the purchasing power.

So while, we are told, almost every day on CNBC, MSNBC, Fox Business News, and the cable network business news channels that we are experiencing deflation, which does not mean that we can achieve automatically any and all industries. And, as we watch the oil prices come back up, it very much increases the price of food, the whole food requires fuel for tractors, for navigation on the market, and to deliver it in restaurants. The restaurant industry is not out of the woods yet, even though many of the larger chains are reporting higher profits now, and I hope you will please consider all this.


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