Tuesday, April 07, 2009

Own any Restaurant Stocks? Think Twice

If you own any restaurant stocks you will want to pay close attention to this article.

Since 1990, the number of restaurants and bars has grown to 537,000 from 361,000, a 49 percent increase, according to the National Restaurant Association. Population in the United States grew 23 percent in that period.

Amid the seeming prosperity of a credit-fueled era, people got in the habit of eating more and more of their meals out. The association’s statistics show that 48 cents of every food dollar is now spent at restaurants, compared with 40.5 cents per dollar in 1985.

In a recent note to investors, John Glass, an analyst for Morgan Stanley, said the casual dining industry — midrange restaurants like Applebee’s — needed to shutter about 1,200 of its roughly 18,000 locations to regain financial health.
Read on at the New York Times--Empty Tables Threaten Some Restaurant Chains
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