Restaurants Dealing With Consumer Slump

Rising gas prices, credit card minimums and interests rates have been eating into customer's pocketbooks at casual restaurants. Macaroni Grill, Brinker International's Chili's and Applebee's are feeling the slump.

So how bad is it? What are restaurants doing about it? And who benefits?

For all Brinker restaurants in July, same-store sales were off 2.7 percent... A May survey of 400 consumers found that almost one-quarter reported spending less when they did eat out, according to Sandelman & Associates, a restaurant consulting firm in San Clemente, Calif. The numbers were even greater for the people who said they made $25,000 to $50,000 annually. Forty-one percent reported eating out less, and 29 percent said they were spending less, Chief Executive Robert Sandelman said.

Restaurants are fighting back with smaller portions as well as serving less-expensive items.

For some restaurateurs, a slowing economy might represent an opportunity.

"I can't quantify the degree, but we may be getting some of those guests from the casual dining restaurants as money gets tight," said Julia Stewart, chief executive of Glendale, Calif.-based IHOP Corp., which is considered a less-expensive family restaurant. IHOP has an average guest check of $8.61.

[via Chicago Tribune]