Restaurants - Something To Watch

Here is a negative piece on how foot traffic at restaurants was down a good bit in July.

https://www.nakedcapitalism.com/2017/08/wolf-richter-worst-restaurant-recession-since-2009-dings-inflation.html

I am not wholly agreeing with the doom-and-gloom title as one month does not a recession make, but it is an area to watch.  I similarly saw an article this week where one chain, Applebee's, is reversing course on trying to change their menu and stop advertising to get millennials in the door.

Some of this undoubtedly relates to the same problem afflicting retail stores.  They are way overbuilt.  I saw a piece this week noting the U.S. has five times as much retail space per capita as Europe, which is the main gloom causing all the store closings given on-line sales - which many point to - are only still 8% of retail sales and Amazon (the store closing Devil) is less than a fourth of that amount.  Nope, it seems we overbuilt retail and in my view overbuilt food establishments and now are paying the price.  The "build it and they will come" motto, is not quite working out too well.  Apparently not for Dick's Sporting Goods, whose CEO described retail as being in panic mode, and this for them is despite the relatively recent closure of Sports Authority,.

http://www.zerohedge.com/news/2017-08-15/dicks-ceo-retail-industry-panic-mode

The reason I am focused here on the restaurant numbers (versus retail) is that a lot of the job growth in this recovery has been in service sector jobs like waiters, bartenders and the like.   Indeed, manufacturing has declined, government hiring is not strong, so the vast majority has been in the service sector.  If that reverses, so will the reduced rate of unemployment, which is highly distorted anyway due to the participation rate. 

Again, just an area to watch.  Not worth sleep over just yet.