If you live in D.C., you seem to discover that there is a hot, new restaurant every week.
But around the country the restaurant industry is facing economic woes, and Andy Puzder, CEO of the CKE chain (it includes Carl's Jr.), and an adviser to Donald Trump, attributes some of this decline to ObamaCare.
Puzder explains inn this morning's Wall Street Journal:
These declines [in restaurant revenue] have consequences. In the past 10 months, eight major restaurant companies, representing at least 12 chains, including Cosi, Logan’s Roadhouse, Old Country Buffet and Zio’s Italian Kitchen, have filed for bankruptcy. What’s causing this drop in restaurant traffic?
In many respects the decline is counterintuitive. Gas prices are down, which normally increases discretionary spending and boosts restaurant visits. Food costs are down at grocery stores, which gives them a competitive advantage over restaurants but should also mean consumers have more money to dine out. That hasn’t happened.
A September survey by the research firm Civic Science found that more Americans are spending less on dining out. The No. 1 reason was, not surprisingly, a worsening of their personal finances. Yet the one factor that “jumped off the screen” was increased health-care costs.
According to the survey of regular quick-service diners who had increased health-insurance costs over the past year, 47% cut back on restaurant spending. That’s very close to the 45% of consumers who are eating at restaurants less than they would prefer, according to an April survey by the National Restaurant Association.
The Civic Science survey also found that consumers whose health-insurance costs had increased over the past year were 30% more likely to say they were “significantly” cutting back on restaurant spending than those whose insurance costs had not increased.
One doesn’t need to be an economist to see that ObamaCare is reducing consumer spending, resulting in a reduction in restaurant visits. Combined with the economic advantages of eating at home due to lower grocery-store prices, we are experiencing what you might call a government-mandated restaurant recession.
With the dramatic rises in the cost of premimums, next year is likely to be worse.