http://money.cnn.com/magazines/fortune/fortune500/2009/performers/industries/fastgrowers/profit1yr.htmlNote that the growth in revenues was only like 9%, but the growth in profits was much higher, suggesting that there's been some recent event which allows restaurants to cut costs significantly. Why? How? Starting your own restaurant is easy. Everyone would be doing it if profits were so high. Its free money.
Snowflake: http://money.cnn.com/magazines/fortune/fortune500/2009/performers/industries/fastgrowers/profit1yr.htmlNote that the growth in revenues was only like 9%, but the growth in profits was much higher, suggesting that there's been some recent event which allows restaurants to cut costs significantly. Why? How? Starting your own restaurant is easy. Everyone would be doing it if profits were so high. Its free money.
Seems to make a little sense to me, especially if you look at the chart in detail. Top performer being Mcdonald's makes a lot of sense, with Starbucks making and Brinker making significant percentage drops in profits. Consumer staples tend to fair better in recessions, though of course what is considered a staple is subjective. For the conglomerate groups it would be interesting to find ot which of their chains are making more profit.
Also, perhaps there's been a drop in demand form other parts of the food sector, due to decreased consumption in other areas, e.g. less home cooking with expensive organic ingredients. Entrepreneurial appraisement is an interesting challenge!
I think it's important to avoid being overbearish. One can certainly be bearish for the economy as a whole, but there are always sectors that do better in recessions and less so in booms and vice versa, and these depend on fundamentals, consumer preferences and expectations. The prudent investor can always make money in recessions, and many even prefer to do so!
"When the King is far the people are happy." Chinese proverb
For Alexander Zinoviev and the free market there is a shared delight:
"Where there are problems there is life."
If you make a profit of 10$ one year and 14$ the next year, you've had a 40% growth in profits.
The fallacies of intellectual communism, a compilation - On the nature of power
Stranger: If you make a profit of 10$ one year and 14$ the next year, you've had a 40% growth in profits.
That's right.
Likewise, if the entire food industry profited $1 last year, and $1.40 this year, their profits would be up 40%.
Now saying "40% of revenue is profit" is an entirely different thing.
The devil is in the details. This is just MSM trying to spin people's perception of the economy as recovering.
Stranger:If you make a profit of 10$ one year and 14$ the next year, you've had a 40% growth in profits.
I talked to a friend who owns a couple of restaurants... food is a minimal cost compared to labor and overhead. Maybe labor got cheaper...? But I thought most got paid min wage already. Who knows. Maybe the animal spirits are *depressed* so they eat more fast food to try and stay happier.