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Tax Rebates Unlikely to Help Restaurants

May 9th, 2008 @ 2:00 pm

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Tags: Food, NPD Group Inc., Food & Beverage, Taxes, Sales Channel, Free Trade, Financial Services, Manufacturing, Financial Planning, Finance

The tax rebate checks being mailed out by the federal government won’t do much for the restaurant industry, according to a survey by Technomic. The foodservice research outfit found that about 10 percent of consumers plan to use their checks to indulge in a night out at a nice restaurant, but just 3 percent plan to make a habit of dining out. Mostly, consumers plan to put the money in the bank, use it to buy groceries, or pay off credit card debt.

Another researcher, NPD Group, is more hopeful, but it is basing that hope on an earlier rebate during an economic downturn, according to Nation’s Restaurant News. In 2001, NPD says, restaurant traffic increased “markedly,” as Nation’s Restaurant News vaguely put it. Of course, in 2001, food costs weren’t soaring through the roof as they are now, along with most other household expenses.

Just below that article, which topped the Nation’s Restaurant News homepage, was another one reporting that Landry’s Restaurants saw its profits plummet by 93 percent in the first quarter on flat sales.

Also, California Pizza Kitchen reported a 30 percent drop in its first-quarter earnings, thanks to higher food costs. Still, same-store sales eked out a slight gain of 0.4 percent, and total revenues were up by more than 10 percent.

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Dan Mitchell

Dan Mitchell has spent the past 20 years writing and editing for newspapers, magazines, and Web publications. Currently, he writes the What's Online column for the Saturday business section of the New York Times. He has also written for the Chicago Tribune, the Minneapolis Star-Tribune, National Public Radio, Business 2.0, and Wired. more »

AboutFood Industry

BNET Food provides daily industry news coverage and insights for managers and executives, focusing on the major companies in the food and beverage sector, from manufacturers to retailers. In addition to detailed company profiles, we bring you critical analysis on new alliances and partnerships, new products, mergers and acquisitions, labor and cost management, investments and deal flow, and a host of other important business issues.