by Daisy Luther, The Organic Prepper:
Americans love to eat out. But recently, many have reported that even fast food costs too much due to inflation and the demands of higher wages. Hundreds of popular restaurant chains have closed locations this year, which is concerning. You might call it the restaurant apocalypse.
When a meal for one person at McDonald’s costs nearly $20, most folks would rather add that money to their ever-climbing grocery bills. People are choosing not to eat out anymore, and that is a really bad sign for the economy in more ways that one.
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The workers are affected, the franchisees are affected, the landlords of the restaurant properties are affected, and then there are all the other bills that don’t get paid because of the initial folks who lost income.
What restaurants are closing?
Recently, you may have heard that Red Lobster has recently closed dozens of locations with more on the chopping block. But that’s not the only place shuttering their shops. They’ve filed for bankruptcy and many blame its ill-fated Ultimate Endless Shrimp promotion as being the straw that broke the lobster’s back.
Fifteen Pizza Hut locations in Indiana closed overnight, due to a financial dispute with one of its largest franchisees. And there could be many more to come.
The dispute centres on millions of dollars in unpaid bills and puts 129 more locations in Illinois, Georgia, South Carolina and Wisconsin at risk of closure. (source)
Applebees has closed more than 300 restaurants in the past year, and another 25-35 locations are due to close this year.
Boston Market used to have hundreds of locations but is now down to only 27 remaining after abrupt bankruptcies.
It’s also the end of an era at Steak ‘N Shake. They’ve dwindled from more than 600 locations to 148 over the past few years.
Other restaurants closing locations include Denny’s, Hardee’s, PDQ, MOD Pizza, TGIFriday’s, Dairy Queen, KFC, Cracker Barrel, Outback Steakhouse, and Arby’s.
Whether you eat at these places or not, the abrupt closures are sending ripples through the economy.
A lot of people are losing their jobs.
The scenario is a lot bigger than not being able to get your favorite junk food fix. When a business closes overnight, all the folks who worked there are very suddenly out of a job. Forbes reports:
Restaurant closures place workers in a precarious situation. Employees immediately lose their source of income and employment benefits, including health insurance. This can create significant financial hardship, especially without severance pay.
If someone is working at a lower-paying job like a fast food restaurant, it’s probably difficult for them to have a hefty emergency fund to weather this storm. Some have complained they were even unable to get their last paychecks from closed locations, leaving them out of money that they had already earned. How does a person making minimum wage come up with the rent money when one of their checks is withheld? When their income stops instantly?
This is an indicator of an economy that has been stretched thin.
We’ve watched thousands of retail stores close over the years. We’ve watched banks closing branches quite suddenly.
Now we’re watching as an American tradition – going out to eat – is beginning to dwindle. We used to go out to dinner for all sorts of reasons: an outing with friends, a date, a celebration for an accomplishment, a weekly event with the family, or something to eat when you have no time to cook.
But with prices going up in every sector, a lot of folks are no longer willing to pay $20-30 per person for a meal – often one that isn’t even very high quality. When you can barely afford groceries, rent, and medical bills, an $8 Big Mac isn’t high on your list of priorities.
Have you seen chain restaurants closing in your area?
I used to eat out with my family once a week or so, but now we hardly ever do. It’s simply too much money that could be used elsewhere.
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