RE:RE:RE:More Retail APOCALYPSE: Domino's CLOSING 1000s Of Stores zt - good points
As I often do here, I will provide a historical perspective.
Prior to a recession, we often see a shift in consumer behaviour to those business activities that offer discount pricing as opposed to premium pricing. One of these behaviours is a shift to QSRs. We saw this happen last year. This is an early sign that a recession is coming as consumers are squeezed in terms of real disposable inncome. The next step in this process is that the discount businesses are struggling in terms of sales. When this happened, in the past it was a telltale sign that a recession is imminent.
So the fact QSR are now facing problems is a big clue about the "other shoe falling".
As I mentioned in previous posts, consumers have been keeping the economy moving by keeping up their spending through credit card debt which has been skyrocketing to the highest levels ever seen. But that cannot last forever and especially with the banks tightening up credit.
Frankly, for what it's worth, with the market in the Excessive Greed category, now would be a good time to sell high IMO.