Restaurants: The State of the Union?

Whispers are abound in the food industry about the current price of gas and it’s effect on the delivery of foodstuffs to restaurants, cafes, and caterers across the nation. With the increase in transportation prices, food costs are skyrocketing on everything from flour to fish, making it the biggest challenge for restaurateurs in 2008. Is an indication of recession right here in our own kitchen?

The Food Dude of commented recently on the state of the food industry in Portland, Oregon:

Last year at this time, we had so much news it was impossible to keep up. Restaurants were opening everywhere, chefs were moving, rumors were flying. In a telltale indicator of our current economic woes, nothing seems to be happening, or at least nothing I’ve found has been worth reporting.

I’m more than a bit worried by the lack of patrons in Portland restaurants. Places that are normally packed have been awfully quiet. Catering is very slow. As often in a slowing economy, about the only places that seem busy are the liquor stores. Meanwhile, rumors are flying about restaurants circling the drain; so many I can’t keep up. If things keep slipping downhill, this will be an interesting Spring/Summer.

Noted on a posting by agriculture blogger Robert Pore, food industry consulting firm Technomic reports:

Economic worries among Americans may translate to less trips to the local diner this year…while the industry has enjoyed sustained growth up until now, weaker performance is expected in 2008.

“Because the restaurant industry often serves as a leading economic indicator, our opinion is that the U.S. has most likely entered a recession, or is headed for one,” said Ron Paul, president of Technomic.

What does this mean for those of us in the food trenches? With less
diners, will restaurant workers be out of work in 2008? Stay tuned, dear

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5 replies on “Restaurants: The State of the Union?”
  1. says: Jean Murray

    I believe people are holding on to their money, watching to see what will happen. Those of us Baby Boomers who are getting close to retirement are “practicing” not spending as much.

    It looks like the “self-fulfilling” prophecy of recession is a real possibility.

    Welcome to b5media’s business channel, Jennifer!

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  5. says: Jim Newland

    I’ve got two close friends in the restaurant business. Both work with food service companies and they tell me that costs for their goods and products are skyrocketing due to transportation (fuel) costs. It has to be passed on to someone and that someone is usually the customer unfortunately. Not many people took notice of the independent truckers strike yesterday, but they’ll start taking notice soon at the grocery store. That’s the main area fuel costs are immediately felt by consumers. My wife said Orange Juice was $5.65 per gallon at the store yesterday! It’s getting scary folks, and it will get worse until we can wean ourselves off of our dependence on foreign oil.

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