The restaurant industry is doomed

[Wall Street Forum]

I’ve had this prediction swirling in my mind for some time now but Ive finally decided to make it official.

Before I get too deep in I want to give a bit of my background so you’ll know I have some experience in the field. I worked in the restaurant industry for years. I’ve cooked in bars, country clubs, delis, and even a bowling alley. I even attended culinary arts school. I know a thing or two about food.

The bottom line is there are too many restaurants. There is too much competition. I live near a mall where of course there are a lot of restaurants surrounding it. Bars, seafood, family places, etc. The restaurants in that area are in so much competition that they are always opening and closing. The restaurants are all big chains but they still can’t hack it.

You can only eat at one restaurant at a time so what happens when you have 200 restaurants in a 5 mile radius to choose from? You pick ONE and the others don’t get your money.

Look at the following:

Pizza chains:
Papa Johns
Little Ceasars
Pizza Hut
Riverside
Jet’s
Marco’s
Mellow Mushroom
California Pizza Kitchen
CiCi’s Pizza
Stevie B’s

How many ways can you do bread, sauce, cheese, and meat?



Deli chains:
Subway
Blimpie
Quizno’s
Newk’s
Jersey Mike’s
Firehouse
Lenny’s Sub Shop
Schlotzsky’s
McAlister’s
Jimmy John’s
Jason's Deli

How many ways can you make a sandwich?



Burger chains:
Johnny Rocket’s
Fuddrucker's
Five Guys
Burger King
McDonald’s
Wendy’s
Hardee’s
Dairy Queen
White Castle
In N’ Out
Red Robin
Shake Shack
Steak N’ Shake
Checker’s
Big Boy’s
Smashburger
Krystal’s



Family Restaurant's
Applebee’s
Chili’s
Outback
Longhorn
Taco Mac
Buffalo Wild Wing’s
Denny’s
IHOP
****ey’s BBQ
Hard Rock Cafe
Hooter’s
Joe’s Crab Shake
Logans Roadhouse
O'charley's
Olive Garden
Cheesecake Factory
Pappadeaux
PF Chang
Ruby Tuesday
Red Lobster
Sizzler
Texas Roadhouse
Ted’s Montana Grill



How many ways can you do a family restaurant?







That is just a list of major chains. I made no mention of the small mom and pop restaurants with only local or regional recognition. They also add to the problem.

My point is, all of these restaurants do the same thing. They cook food. When you work in a restaurant you realize there are only so many ways you can cook food. After a while you realize it's all the same stuff.

I believe we’re about to witness a lot of chains scaling back and not opening more new locations. Instead they are going to focus on what they have. The restaurant scene is dangerously overcrowded and a scary correction is coming. The restaurant industry accounts for 10% of the total US workforce employing 14.4 million people. Source. If the restaurant industry goes down, the economy as a whole goes with it.



How to play this forecast:

Find a basket of restaurant stocks in ETF's like these:

PEJ
PBJ

Wait for a break in the uptrend to happen and jump on for the big short.

[JBgroove]

Couldn't agree more. Its literally all the same ****.You'll see restaurants completely empty and they keep opening more.

[Wall Street Forum]

Proof positive!

Subway to close 500 restaurants across the US

Subway Restaurants is projecting it will shutter roughly 500 locations across the U.S. as it expands the sandwich brand globally.

The chain closed more than 800 of its stores last year, which followed a smaller pullback in 2016. In turn, Subway expects to add more than 1,000 locations worldwide, including in Mexico, the United Kingdom, China and India.

Some will say its because of an inferior brand, bad customer service, blah blah blah.

Its because there are too many restaurants...