A friend emailed a link regarding Olive Garden traffic and sales. I created a new chart that agrees. Call it the breadstick indicator.
The Breadstick Indicator
Please consider Heard on the Street: Breadsticks Highlight Financial Strain on America’s Middle Class
Olive Garden, Applebee’s and IHOP are the closest informal economic barometer, according to a study by professors at MIT’s Sloan School. And unlike mom-and-pop restaurants, parent companies Darden Restaurants and Dine Brands helpfully break out detailed numbers for investors in their quarterly results. The signs for the U.S. middle-class consumer aren’t great.
Darden reported Thursday that same-store sales at Olive Garden fell by 1.5% last quarter from a year earlier. By contrast, same-store sales rose by 4.4% a year ago and by 6.1% and 4.1% in the first two quarters of this fiscal year before falling by 1.8% in the fiscal third quarter.
Likewise, Dine Brands Global reported last month that domestic same restaurant sales at Applebee’s and IHOP fell by 4.6% and 1.7%, respectively, during that company’s fiscal first quarter.
Placer.ai also points out a far healthier trend at Ruth’s Chris, the high-end steakhouse Darden bought a year ago and for which it doesn’t yet break out same-store trends. Traffic to that chain in May was up by 8.3% compared with a 3.9% rise for Olive Garden.
Traffic at Olive Garden is up 3.9 percent but but same store sales are down 1.5 percent. Are people filling up on unlimited breadsticks? Drinking less wine?
Meanwhile, traffic at Ruth’s Chris is up 8.3 percent.
I’m not sure I believe traffic is up 3.9 percent at Olive Garden, but I do believe the discrepancy with Ruth’s Chris as well as the declining Olive Garden store sales numbers.
Retail Sales Were Very Weak in May Counting Negative Revisions
On June 18, I commented Retail Sales Were Very Weak in May Counting Negative Revisions
The Olive Garden article inspired the lead chart. Retail sales are weak elsewhere too.
Housing Starts and Permits Drop to the Lowest Level in Four Years
Hoot of the day: The Bloomberg Econoday consensus had housing starts and permits both rising. Several charts show how much they dropped.
Earlier today I noted Housing Starts and Permits Drop to the Lowest Level in Four Years
Few can afford houses.
Job Openings vs Unemployment Looks Very Much Like a Recession Has Begun
Unemployment is rising and job openings have crashed. It looks recessionary. Let’s investigate with a series of pictures.
Weakness is pervasive. For discussion, please see Job Openings vs Unemployment Looks Very Much Like a Recession Has Begun
less garbage food consumption might be good for health. bad for SS admin……
I wouldn’t be surprised if their wine sales were primarily responsible for the drop in same store sales.
These restaurants now charge outrageous prices for the cheapest, mass-market wines – now as much as $12 or more per glass. It has gotten to the point where my wife and I will no longer order wine with dinner. If there is a corkage policy, we will bring our own and pay the fee. If not, then it’s just a glass of club soda – which they also overcharge for, but not nearly as expensive.
Growing up, my family wasn’t rich, but we weren’t poor. My parents grew up in the Depression and were frugal with their hard-earned money. They would go out to a nice restaurant once or twice a month. My dad would always mix cocktails, or pour some glasses of wine, prior to going out to the restaurant.
my parents were depression/ww2 born 1916. they went out to restaurant once per annum. they had plenty of money after decades of hard and frugal work and raising many children and paying for cousins college too…………
We go to an italian place in topeka ks. Better food. Free breadsteaks and salad. Usually better service than olive garden. We stopped going to og a few years ago over lousy service
I wish Olive Garden broke out bread stick consumption. Would be interesting to see if bread sticks are outpacing the traffic increase at OG.
The Olive Garden v Ruth’s Chris comparison is consistent with Mish’s renters vs owners take. Definitely the tale of two economies.
PA, a swing state, the fifth most populous state, intend to ban RFK bc he’s a D spoiler.
Are you surprised?
would also add: Does anyone ask the question what do these people have to hide since they would go to any length including usurping the Democratic process just to cling to power?
Shakespeare : ” The Lady doth protest too much, methinks”
The American people have to prepare for the worse. The worse isn’t bread sticks in OG, stock market crash, or higher rent, but losing our freedom by a gov that suppress our human rights in frog cooking. On CNN we will learn if Trump was prepared to survive Biden’s killing fire, or not.
EU electric car sales drop in May as German demand slumps, industry says
Sales of new battery-electric cars in the European Union dropped 12% in May from a year earlier, led by a 30% plunge in Germany, data from Europe’s auto industry body showed on Thursday.
https://finance.yahoo.com/news/eu-electric-car-sales-drop-061037257.html
The more they drop the more they will drop…. till the only EV available will be a golf cart
Elon Musk’s company recorded a 34.2% drop in May sales in the EU.
https://finance.yahoo.com/news/eu-electric-car-sales-drop-061037257.html
hahahahahahahaahahahahahahaha BOOM
Jeff Green?
all EVs are golf carts.
there is no new “tech”… there’s no secret sauce… just marketing hype & non-recyclable, toxic battery tech that hasn’t changed in 120 years.
maybe AI will design better batteries. /sarc
I saw it up close and personal last fall when I paid $15 for two cheeseburgers, two small fries, and two soft drinks at a McDonald’s in La Grande, Oregon, population 13,000. That same food cost $1 when I was a kid, and the service was instantaneous rather than a 15 minute wait.
Adjusted for inflation, it should have cost $8.65, and thats not allowing for any productivity improvement or chain-wide economies of scale. But no, it was $15. I could afford it, but it made a huge impression. We don’t dine out nearly as often as we did three or four years ago.
I think what’s really happen is inflation was suppressed for a long time and then came roaring back. A lot of people worked for peanuts for decades. They are living better now. That $15 is for the whole supply chain and not just the end product.
You make up a lot of things.
“That $15 is for the whole supply chain and not just the end product.”
It ain’t for farm labor. Nor, despite Newsom’s latest PR stunts, from burger flippers living it up in mansions.
Instead; it’s all rent, “insurance”, “legal”, taxes, “permits”, “investor” rake etc., etc.
IOW: As is the case for all of America: More and more of money spent; goes to every useless leech under the sky, EXCEPT those who actually create the actual product of value.
You need to think about it as purchasing power, not nominal dollars. The majority still works for peanuts.
How do companies that are worth many billions more than when they use to sell burgers for $1 now looking for ways to sell a value meal for $5 ? Why do they make many billions in profits while raising prices on everything at every turn ? The reason is companies have to pay investors back first. The customer doesn’t matter as much as the investor. It is a delicate balance that corporations have managed to fleece everyone at rhe benefit of the investor first.
https://finance.yahoo.com/news/mcdonald-5-value-meal-intensifies-105802707.html
Maybe return to the Soviet economic model. No greedy corporations. Nothing worked properly, the products were crappy but people had very low expectations and the black market was available at higher prices for better or scarce product. Yeah, no.
“Maybe return to the Soviet economic model.”
We have.
“No greedy corporations.”
They were just as greedy there. And worked the same way: Permits for Party Member Me, not for more competent potential competitor you.
“Nothing worked properly,”
Welcome to America.
“the products were crappy but people had very low expectations”
Yes they are. And yes they don’t. Pervasive indoctrination -> people don’t know better.
“and the black market was available at higher prices for better or scarce product.”
They did beat us there. As opposed to comparatively free market them, “we” are far too 100% totalitarian, to even have a functional black market for anything but drugs.
“Yeah, no.”
Uh, yes.
So what are you going to do? Move? Join the rest of the ostrich impersonating sheep in mindless chanting of “we the bestest!”; while sinking even further, to depths of totalitarian depravity even Stalin at his most delusional could only dream of?
true. and welcome to amerika. has always been a land of grifters. we ain’t europe.
Cost me nothing as a teenager as I knew all the girls at McDs
“Knew-All-The-Girls” deflation indicator is tilting fast.
The prices it started with:
Hamburger 15¢.
Fries 10¢ (one size, smaller than today’s small).
Shake 19¢ (chocolate or vanilla, don’t remember strawberry).
What has the Government done to our money?
Fiat currency. That’s the way it works, until it doesn’t.
I remember the 15-cents hamburger!
In Illinois, not far from McD’s number one, we got dime burgers in 1963 our “burn-out” hang out – – all the hot cars were backed in. The babes were every freaking where. I owned a 1962 Impala SS with a Hurst Flat Shifter and Muncie tranny.
That Muncie tranny is now the mayor and is the master of ceremonies for the Pride Parade.
Yes, my standard, teenage order was 5 hamburgers, an order of fries, and a coke, for $1.
No place to sit, sat on the curb outside to eat.
sounds like wetsons walking distance from my home in youth
When I was a kid, cheeseburgers were 20 cents, fries were 15 cents, and Cokes were 15 cents. Two of each for a buck.
MCD fries back in the day were peeled and cut on-site from fresh spuds, then sliced into shoestrings by hand by pulling a handle to drive the spuds through the cutting grid and then fried in beef tallow. They were yummy. No comparison to current garbage. MCD trained employees to double fold the bags, sent a worker around the block to pick up trash and kept the store, order area and eating areas, and lot really clean. I used to go into the local MCD in summer heat for an iced tea, but they raised the price and I can make a quart at home for 1/10th of the price of a large iced tea that is mostly ice. The interior of the store always stinks and the lobby area floor is as slippery as I remember the grill area back in the ol’ days. . The workers are slobs and the manager looks like he never changes his shirt.
“What has the Government done to our money?”
Stolen it.
That’s what governments do.
It’s not yours, you are just borrowing it.
You simply cannot undercount inflation in order to falsify interest rate policy for nearly all of the last 15 years saving for the most recent late-to-the-fight move higher by the Fed, watch housing prices double in about 4 years and have equities rise nearly 9x over that time and expect the bottom half of the birfucated economy to simply continue to do their part–they cannot. If you think we can have half the population eating high off the hog whilst the rest are to let-them-have-cake and not have a disconnect that MUST resolve to a place somewhere closer to the middle, well you’re a more accepting person than me.
This election and where we are at is all about asset holders vs non asset holders, whether you want to call them “renters” or not. Half the population has participated in that 9x equity run and then probably 4x housing run over the last 15 years and the other half hasn’t. Those that have want to retain it, those that haven’t will exact their revenge elsewhere–ballot box, crime, squatting, social unrest.
Call it a breadstick indicator, I used to have a baked beans indicator. Prices are still WAY too high. Asset holders and investors are holding on hoping the fed will pivot and the party will go on. Non asset holders don’t have any reserves any longer to play along and everyone is reporting it and seems surprised.
Interseting observation here: beer prices seem to be quite stable and have barely notched the inflation seen on other goods. If beer prices had followed the price trajectory of soda or other groceries I bet we would have arrived at a reckoning sooner. In Minnesota when the government shutdown dragged on, it miraculously was resolved when beer licenses and transport would have been impacted. Boom, resolved.
Folks that have not benefitted from the massive explosion in asset prices since the 2009 intervention and 2020-2021 pandemic stimulus response cannot swallow the true inflation from a firehose for 2 years and now the cracks are appearing. Notice the market and home prices are still up there. Guessing massive liquidity is still flowing through the system while the Fed feigns they are doing something by keeping short rates near 5, not all that high by historical standards.
We need a comeuppance, it’ll hurt but this cannot persist despite folks that own stocks and houses wanting their values to stay where they are. People know it, they just don’t wanna admit it. Who wouldn’t want to eat steak at Ruth’s Cris on multiple expansion in the equities arena or sitting on a 3% mortgage in a house that has doubled. The desire for a check-valve on good times is strong but when it comes at the expense of 50% having limited opportunity to EVER participate, I think there will be a reckoning.
Got oil? You see, that even felt bad when I typed it, sorta like Marie Antoinette.
From my observations it seems that a large Big Mac or Whopper meal has continued to trend as far as costing no more than the starting hourly wage at McDonalds or Burger King.
At the Burger King by Edgewater Resort in Panama City Beach, FL , it costs about $12 for a large Whopper meal, and I believe they advertise a starting wage of $14 per hour there.
From my last 35 years very infrequently eating at McDonalds and Burger King, I’ve noticed that a large meal there has always been no more than the starting hourly wage at these fast food restaurants.
Boomer Janet, who just missed being in the Silent Generation by one year, said it isn’t the Fed’s job to lower prices, you see.
Janet works for the Treasury, not the Fed.
Very different bureaucracies, doing very different things.
I’ve got to disagree on the beer prices, unless you are talking Modello, Bud and Coors. Craft beer prices have risen in the last 4 years. Went from $8-12 a six-pack to $10-12 now. Thats not as high an increase as gas or eggs, but it’s a rise.
Then there is the 11.2 ounce 12 ounce beer.
These numbers are noise. There are other places fo look for shrinking middle class consumption. I wouldn’t classify having the money to go to olive garden but spending 5% or less than you did the previous year as suffering.
“I wouldn’t classify having the money to go to olive garden but spending 5% or less than you did the previous year as suffering.”
In first world countries, not being able to eat at low cost places without pinching, IS comparative suffering.
It’s one of the differences between first and third world status.
“Olive Garden, Applebee’s and IHOP are the closest informal economic barometer, according to a study by professors at MIT’s Sloan School.”
Oh look, the IHOP index. Add it to the BigMac index, and you have a whole economic picture without the need for Bureau of economic statistix.
Never been to OG or Applebees but I used to enjoy IHOP
big mac index is best as one can compare internationally best using PPP and other means……….
– The signs for the U.S. middle-class consumer aren’t great.
> Not at all, and it appears to be getting worse, by differing policy, but all end up doing the same thing over and over again.
– Sales at Olive Garden fell by 1.5% last quarter from a year earlier. Likewise, sales at Applebee’s and IHOP fell by 4.6% and 1.7%, during fiscal first quarter.
> lowest rung gets over stepped first. When it come to pasta, sauce and bread, it’s a place for when you have the need to go out, can’t afford too much, so that will do. Applebees is overpriced, and under value, compared to competitors, and IHOPis breakfast, and ALL Breakfast is Local, for purposes of this discussion anyway.
– Meanwhile, traffic at Ruth’s Chris is up 8.3 percent.
> Highest rung rarely ever gets stepped over but when it does, the stairs are broken for Everyone at that point.
– Retail sales are weak elsewhere too.
> From where I sit, sales are weak, unsteady, or weekend only, everywhere but the Higher Rungs it seems, for now anyway… I expect this to get worse and worse, as time passes.
I have hazy, vague memories of eating in restaurants and shopping in department stores. Maybe from a former life?
Yup pre 2001 for me and post 2015 after I moved to Europe
U.S. Disability Approaching New ALL-TIME HIGHPeople are sick and injured at near-record rates, but what’s causing it?https://eccentrik.substack.com/p/us-disability-approaching-new-all
Perhaps someone could tie this into the ‘robust’ jobs market narrative … and blow it to pieces?
Disability is the new welfare, massive fraud.
I’m actually disabled, and I don’t take disability or even use a placard for parking. It wouldn’t surprise me if a third or more of disability recipients are outright fraudsters.
There are a lot of work at home jobs from gigs like surveys to customer service jobs through Omni Interactions.
Legit sites like Work at Home Job Queen and Rat Race Rebellion are always listing work at home job vacancies.
Working gigs like surveys, etc at home on you computer is a way to earn supplemental income like $7 an hour and 1 hour a day of available surveys.
I suspect this is the route of the economy for the working class in order to sustain its standard of living.
I love being exploited. Thanks for the links.
Odd that the fraud all kicked in big time when the Covid Rat Juice death shots started… and they ramp up after every booster…
Are you suggesting that all the pro athletes who have dropped with heart issues, strokes and blood clots…. are faking it?
I’ve got 3 good friends with severe damage… one is a pro hockey player mate in Europe who has had to stop playing due to myocarditis… started with a few hours of the Death Shot…
Are you suggesting he is faking?
It’s not new That grift has been around awhile
A tale of two economies, here in LA the working class can’t afford fast food but the investor and upper class are filling up the white tablecloth restaurants. Doesn’t bode well..
Seems like a “ let them eat cake” moment is imminent
Leave the cake, eat the rich!
Appreciate your posts, Mike, always learning much. Concur with the consumer stress. Wife and I continue to eat out now and then but do everything possible to avoid sodas and/or alcoholic bevs at 8 to 10 bucks apiece, and often frequent local Mexican or Asian restaurants with good portion sizes that turn into a great lunch the next day at work.
Agreed!
That’s where they make their real money especially alcoholic beverages I’ve always avoided that trap
“portion sizes”
the only restaurants that thrive/survive around here are essentially selling you two meals: tonight’s dinner & tomorrow’s leftovers.
yes, the prices are a lot higher… and these owners/kitchens have figured-out that they cannot stay in business just selling one meal at-a-time.
they have to charge more per customer/visit due to higher operating costs, but the trade-off is that they are selling you two meals, not just one.
i see this “one visit=two meals” phenomenon everywhere now. the new normal.
California sucks.
No, No, it BLOWS…renewable energy wind farms! /sarc