Restaurants Hungry for Economic Recovery

Rising food costs, tight credit cut into profits
By Jim O'Neill,  Newser User
Posted Apr 24, 2008 1:04 PM CDT
A McDonald's restaurant sign is seen in Tonawanda, N.Y.   (AP Photo/David Duprey)
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(Newser) – Rising costs, tightening credit, and trimmed consumer spending are giving restaurateurs indigestion as they struggle with a slowdown the industry says is its worst in decades, reports the Wall Street Journal. A spate of bankruptcy filings and woeful earnings reports have chains slowing expansion and cutting amenities. With a minimum wage hike set for this summer, things could get worse.

Even seemingly recession-proof eateries like McDonald’s are seeing sales decline. The $558-billion industry employs some 13.1 million people; a continued downturn with restaurants closing and laying off staff would be especially painful for lower-income workers unlikely to have savings.