Consumers Skip Dining for Cars as Sales Slow

[Purveyor]

Restaurant sales contracted in June and July, even as spending on other discretionary categories such as automobiles and homes grew, a sign some Americans remain budget conscious.

Results at casual-dining establishments fell 3.5 percent last month, following a 2 percent drop in June, according to the Knapp-Track Index. This marked the first two consecutive declines in the monthly index of restaurant sales after the industry was rocked by its worst streak in almost three years between December and February.

Preliminary data suggest that August sales still are weak, though “better than July,” said Malcolm Knapp, a New York-based consultant who created the index and has monitored the industry since 1970. The summer slowdown is a symptom of a “reallocation nation,” in which people choose between different discretionary items to purchase each month, he said.

Brinker International Inc. (EAT), Cheesecake Factory Inc. (CAKE), Texas Roadhouse Inc. (TXRH) and Bloomin’ Brands Inc. (BLMN) were among casual-dining restaurant chains that cited slower sales in their most-recent quarters, as several companies cut earnings guidance.

“Consumers’ priorities change every month based on what they can afford,” Knapp said. Many Americans don’t eat out as often as they would like, and they’ve had to cut back “very begrudgingly” on meals away from home to help subsidize other purchases.

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http://www.bloomberg.com/news/2013-08-23/consumers-skip-dining-for-cars-as-sales-slow-ecopulse.html

[hobbit709]

1. Could be the difference between a necessity and a splurge.

You don't have to eat out but you most likely will have to drive to work.

Of course none of those brands listed are any place I would want to eat at.

[R. Daneel Olivaw]

2. We don't eat out.

My wife and I take turns cooking.

We do have a newish car that we needed before the arrival of our daughter. The old one (17 years old) was about ready to die.

Whatever money we have left goes to bills and such so eating out really isn't that important, and it costs too much.