The Nation's Financial Condition

[youthathletics]

Will be interesting to see if gas prices begin to rise as more places open back up.

[Farfromgeneva]

Here you go Afan, while I’m really not stressed about a major shakeout in restaurant and bars, frankly it’s like society is purging itself of something not so great for itself like a forest fire cleaning up dead trees as far as social “good”

Restaurants are bad for society?

In any event, even if you don't care about all the restaurant closings coming------a man in your business should worry about the effect these closings will have on the commercial real estate where all these restaurants used to live. What is going to go into those spaces? Certainly not retail.

And then there's office space and airlines....how many managers all over the world are looking at how much money and time they are saving from not having their workers commute or travel? And what will that do to future choices?

Eating in is more optimal for human life in almost every aspect, financially, health perspective, etc. I used to travel 150-200 days a year or more for a few years, know how hard it is to eat clean, even at a generic chain TGIF or whatever, let along a nice restaurant, the broccoli is drowned in butter, chicken is cooked in the fat inside of fat...BUT the Rathbuns Eggplant Fries were the BOMB! (the entrees were excellent as well) I can separate my business brain from my professional brain enough when I need to in order to be bummed that a great restaurant is gone (for now) and I don't feel bad for a CRE buyer from Charlotte who way overpaid for the complex a year ago to redevelop and is going to lose their shirt, they priced it for perfection and, to some degree, a greater fool theory, which works in major top 5-6 city trophy properties like the GM building in NYC where no one has ever made money on the cash flows alone, but rather on the terminal value flip, but not so much with high end, already redeveloped from broke down industrial, trendy properties that rely on super high restaurant and B.S. retailer rents to manage a slim 7-9% IRR on highly accomodative financing terms. Especially not in a "new money" (culture, there's plenty of old money who's kids go to Westminster and all do each others real estate deals with their parents money) city like Atlanta where the crowds move to a new neighborhood for a few years, but then leave for the hot new thing leaving not much behind like a set of locusts (a problem for less dense, infill, vertically challenged cities like Phoenix, Atlanta, Dallas, Orlando/Tampa, Houston, etc.). Only in good times does basis not matter.

I pay attention to CRE all the time mainly now due to the second derivative effect it has on bank balance sheets, it hasn't been my primary work in a decade give or take outside of one small MHC I own as a side hustle. Little more concerned about the fact that WeWork, who I would bet any amount I personally could on Ch 11 failure, if I could (only way is super imperfect with credit defaults swaps on a cohort of recently issued CMBS, and that's far from perfect, as a short), is the largest office tenant in like 6/9 largest cities/markets in the country.

No doubt there's almost a complete reset in lease rates and CRE economics in this country coming (non cold storage industrial and barely pitched roof, brick built, garden style apartment complexes). May take a couple of years, but occupancy costs have to come down per unit (square foot) across the board for businesses. Everything got too tight, some of that was cyclical with more robust capital markets for CRE financing and will come back a little anyway (cap rates range over time, though often as a spread to the ten year US Treasury bond by property type), but as a expense line item it's gotten too high from the institutionalization of CRE over the last 25yrs along with higher liquidity in that market. It's easy to see in retailers, occupancy cost is a covered metric, but for other operating businesses, it gets tossed into S,G&A and often isn't scrutinized because "the market is the market" and also because there's high switching costs to moving. If CRE owners move towards more variable rent or % rent (% of revenues, sometimes in place for some retail CRE), then that dynamic changes, but it would also mean an end to fixed rate, longer term, non recourse financing, take all that debt capital out of the market, lower leverage and lower valuations due to high equity requirements in CRE capital structures.

I also don't but this notion that we will move to a virtual world. I've been on this planet long enough now to have seen numerous mass movements to less human interaction, some sticks, probably less than 20-25% of what is promoted/touted/envisioned at the moment in time, and the rest goes back. Basic organizational behavior teaches us that each level of more virtual interaction the weaker the form of communication and in a IP heavy, asset light world communication is more valuable than raw "data" which is what every monkey thinks they can monetize vs. value add creation these days.

[Farfromgeneva]

PPP worked for us. It took a long time to come through, but it enabled us to keep our entire Well Pet Clinic staff on payroll for the 7 weeks we were at state mandated reduced operations. It would have sustained us even if we had to shut down completely for the lockdown period.

Is a well pet clinic something that offers effectively “elective” services or also basic veterinary needs? Caught my attention as my friend is CFO of a lender called LendingUSA that does point of sale and their second largest vertical is veterinary after funeral. Third which has fallen back is elective dental, but basically they are term/installment lending version of CareCredit or Greensky, the vet or funeral home offers the financing but it’s made by these guys who have well over 1,000 vet businesses in their network.

My understanding is elective everything drops far far faster any necessary services even when it comes to pets (less elastic demand sensitivity, so to speak, treated as necessary)

[a fan]

I will openly admit that I had to read that post twice to understand it, farfromgeneva.

And I read slowly.

I love your posts on this subject, thanks for taking the time to write them! I learn a ton.

I have come to the conclusion that I'm horrible at macroeconomics. I can only understand what I see on the ground...and I mistakenly assume that what I see up close will mirror what happens nationally.

I'm working on it!

[old salt]

PPP worked for us. It took a long time to come through, but it enabled us to keep our entire Well Pet Clinic staff on payroll for the 7 weeks we were at state mandated reduced operations. It would have sustained us even if we had to shut down completely for the lockdown period.

Is a well pet clinic something that offers effectively “elective” services or also basic veterinary needs? Caught my attention as my friend is CFO of a lender called LendingUSA that does point of sale and their second largest vertical is veterinary after funeral. Third which has fallen back is elective dental, but basically they are term/installment lending version of CareCredit or Greensky, the vet or funeral home offers the financing but it’s made by these guys who have well over 1,000 vet businesses in their network.

My understanding is elective everything drops far far faster any necessary services even when it comes to pets (less elastic demand sensitivity, so to speak, treated as necessary)

Our major offering is low cost spay/neuter (many grant subsidized, for low income pet owners). MD (wrongly in our opinion) deemed them "elective" & we were restricted from performing them (many have been deferred, thankfully). We were permitted to do rabies vac's & treat emergencies. What constituted emergency care was left to the discretion of the vet.

Well Pet clinics typically focus on spay/neuter, routine vacs, & minor problems. We don't do x-rays & spay/neuter is our only surgery.
Many full service vets in MD closed down or did only emergency care.

[Farfromgeneva]

Afan, You mean my reply to your comment on restaurants? Yeah if I'm writing in the middle of thinking about my work it goes wherever my mind is at in that world as far as use of language goes. Good thing I am not an extra on Magic Mike eh?

But restaurants - enjoy them but don't think they add that much to society, if we had a few less in this country the only ones it would truly hurt are CRE owners. The good operators/chefs/sponsors will stay in business anyways, it's the weaker ones that get filtered out ultimately. That's what makes all food down to bodega egg and cheese sandwiches in NYC so awesome, if you're less than very very good you're out within a year or two. Competition at it's best (except famous Rays pizza which only my father thought was good but has many locations for some odd reason). They pay the highest rents and drive overall retail rental rates up and most hip landlord/owners know they can backfill that "cool idea" bourbon bar and restaurant with hipster appeal for another new Poke joint or whatever at rental rates higher than any other tenant (except banks and doctors who overpay for specific reasons that are somewhat necessary). It's super difficult to eat out and be as healthy or healthier than eating at home and cheaper on the wallet. So other than the ones I like, I don't view the restaurant sector as that important to our country or society.

The rest was half agreeing that it'll affect CRE valuations. Sure and so will some reduction in office and other uses (except again industrial which in a virtual or remote world will continue to have high demand in all economic cycles at least the "last mile"). MHC = Mobile (or Manufactured) Home Community, i.e. trailer park. Those will always have tenants and if you own the dirt but not the trailers ("personal property") its a highly effective CRE asset class to own and earn off of.

I have a split life, work with funds and banks, so I'll get my scratch in good or bad times. I want to see markets and things "hang around the hoop" of equilibrium type prices/values personally but do better professionally when there's more volatility, high or low. So if CRE gets crushed, fine, there'll be plenty "five guys and some bloombergs" PE/HF operators that will need me to help them at worst paper their acquisition/investment files and best actually advise them on deals and the banks will need me to set them straight on what their true loan positions are (goes for other loans as well) in terms of actual value of various collateral, quality of personal guarantees, analysis of business operations of borrowers, implications for bank capital and markets for said loans/underlying collateral if a sale is determined. But we've had three crappy periods this milllenia and personally would like to see more of a life corridor for the economy - still a big believer in Talib's argument in Antifragile that we created these seismic shocks by not allowing smaller cuts to be inflicted as necessary.

I think what you were saying, Afan, is something most if not all of us are guilty of, some more than others, but conflating personal anecdotal experiences with a broader and more mixed cohort. And on top of it also important to remember than an average, or middle, comes from having at least some folks who are extremists or advocates. Everything is a market in a sense and we're all trying to determine a "price".

[Farfromgeneva]

PPP worked for us. It took a long time to come through, but it enabled us to keep our entire Well Pet Clinic staff on payroll for the 7 weeks we were at state mandated reduced operations. It would have sustained us even if we had to shut down completely for the lockdown period.

Is a well pet clinic something that offers effectively “elective” services or also basic veterinary needs? Caught my attention as my friend is CFO of a lender called LendingUSA that does point of sale and their second largest vertical is veterinary after funeral. Third which has fallen back is elective dental, but basically they are term/installment lending version of CareCredit or Greensky, the vet or funeral home offers the financing but it’s made by these guys who have well over 1,000 vet businesses in their network.

My understanding is elective everything drops far far faster any necessary services even when it comes to pets (less elastic demand sensitivity, so to speak, treated as necessary)

Our major offering is low cost spay/neuter (many grant subsidized, for low income pet owners). MD (wrongly in our opinion) deemed them "elective" & we were restricted from performing them (many have been deferred, thankfully). We were permitted to do rabies vac's & treat emergencies. What constituted emergency care was left to the discretion of the vet.

Well Pet clinics typically focus on spay/neuter, routine vacs, & minor problems. We don't do x-rays & spay/neuter is our only surgery.
Many full service vets in MD closed down or did only emergency care.

I had to do that with my two dogs (one still with us). Felt awful when they came home drugged up, almost seemed like they new they could never be "mothers" again though that may have been the lingering drugs. But...I know that % of getting cancer if you don't fix a dog is tremendously higher, so I can see where that's maybe not essential but more than elective in a sense.

Pet care is a funny business.

[cradleandshoot]

PPP worked for us. It took a long time to come through, but it enabled us to keep our entire Well Pet Clinic staff on payroll for the 7 weeks we were at state mandated reduced operations. It would have sustained us even if we had to shut down completely for the lockdown period.

Is a well pet clinic something that offers effectively “elective” services or also basic veterinary needs? Caught my attention as my friend is CFO of a lender called LendingUSA that does point of sale and their second largest vertical is veterinary after funeral. Third which has fallen back is elective dental, but basically they are term/installment lending version of CareCredit or Greensky, the vet or funeral home offers the financing but it’s made by these guys who have well over 1,000 vet businesses in their network.

My understanding is elective everything drops far far faster any necessary services even when it comes to pets (less elastic demand sensitivity, so to speak, treated as necessary)

Our major offering is low cost spay/neuter (many grant subsidized, for low income pet owners). MD (wrongly in our opinion) deemed them "elective" & we were restricted from performing them (many have been deferred, thankfully). We were permitted to do rabies vac's & treat emergencies. What constituted emergency care was left to the discretion of the vet.

Well Pet clinics typically focus on spay/neuter, routine vacs, & minor problems. We don't do x-rays & spay/neuter is our only surgery.
Many full service vets in MD closed down or did only emergency care.

I had to do that with my two dogs (one still with us). Felt awful when they came home drugged up, almost seemed like they new they could never be "mothers" again though that may have been the lingering drugs. But...I know that % of getting cancer if you don't fix a dog is tremendously higher, so I can see where that's maybe not essential but more than elective in a sense.

Pet care is a funny business.

A bit off topic but still dog related. My wife and I adopted our new forever pet 2 weeks ago. She is a Beagle/Lab/Mutt. She was dropped off waaay pregnant at an animal shelter in Kentucky. She wound up with her foster parents here in NY on a Saturday and she had 8 pups on Monday. Two weeks later her fosters brought in 8 more abandoned pups. Our little Roxy took them all in as her own. This beautiful little girl spent 2 and a half months nursing 16 puppies around the clock. I can't even imagine the love it takes to do that. Roxy is so very special to my wife and I. She has given so much unconditional love and care to all of her pups. Today she is getting the rest, nutrition and the one on one attention she has never had. Next week, hopefully we will be bringing her in to be spayed. My wife and I figure she has done more than her share of taking care of all of her pups. I just have to figure out how to get her to chase balls and for the first time in her life learn how to play. I tip my hat to you OS for all that you for our four legged friends. I don't know how you do it without getting attached to them. There were a number of people that wanted to adopt our Roxy. My wifes connections with the people at rescued treasures put us at the top of the list. I am so grateful we have our little Roxy now running the show at our house. There is nothing close to the love of a dog.

[MDlaxfan76]

Will be interesting to see if gas prices begin to rise as more places open back up.

Well, -$35 a barrel is unsustainable, so presumably there will be some rise eventually.

[MDlaxfan76]

I will openly admit that I had to read that post twice to understand it, farfromgeneva.

And I read slowly.

I love your posts on this subject, thanks for taking the time to write them! I learn a ton.

I have come to the conclusion that I'm horrible at macroeconomics. I can only understand what I see on the ground...and I mistakenly assume that what I see up close will mirror what happens nationally.

I'm working on it!

I, too, enjoy, farfromgeneva's posts, difficult to decipher as they may sometimes be!

A dense, but thoughtful flow.

On the restaurants, 30 years ago 85% of the family food budget went through grocery. That declined to less than 50% pre-pandemic.

It's pretty clear that the dramatic increase in obesity issues track directly with that trend. Huge societal cost, with nearly 50% of all healthcare costs driven by chronic health conditions related to nutrition/obesity.

When we make decisions at the last moment, ala when looking at a menu, we tend to be driven by our impulses, our cravings for sugar, fat, salt. And fast food and restaurants know this, thus compete for our attention by appealing to these cravings. We do far better when we make meals at home, pre-planned. Even if not consciously trying to eat healthier, we, on average, consume fewer calories with made at home meals. Better still if we eat at a table with others, away from distractions like TV that confuse our brains' processing of food consumed.

Even when restaurants label their most healthy offerings to make them easy to find for those looking to do so, ironically, while those healthier items do rise, the items that increase the most in sales are the least healthy offerings. We 'see' the healthy message and say, "oh, but I deserve a break today" or "I'll eat healthy...tomorrow".

So, eating at home is a good thing. It's also much less costly, with a comparable meal costing a third or less than the same meal would cost out.

What concerns me about this squeeze on restaurants is not the shift to more meals at home, but rather that the restaurants most likely to be crushed will be the smallest players, those which represent the most diversity of menus. Do we really need more Big Macs or KFC's or TGIF's? No. We could use a lot less! But entrepreneurs introducing new cuisines, flavors, to our palates...that's a real loss, I think. Likewise, I think there's real value to unique 'entertainment' venues for us to enjoy, with food and libations a rich part of the experience.

The only good news is that this sector is super entrepreneurial, so, if and when we get truly to the other side, we'll likely see them begin to pop up again.

farfromgeneva brings in a whole other set of follow-on issues from the changes that are going to happen in real estate, finance, etc. Interesting.

I think retail and office space are going to be dramatically impacted.

[youthathletics]

What concerns me about this squeeze on restaurants is not the shift to more meals at home, but rather that the restaurants most likely to be crushed will be the smallest players, those which represent the most diversity of menus. Do we really need more Big Macs or KFC's or TGIF's? No. We could use a lot less! But entrepreneurs introducing new cuisines, flavors, to our palates...that's a real loss, I think. Likewise, I think there's real value to unique 'entertainment' venues for us to enjoy, with food and libations a rich part of the experienc

Curious why you suspect that the smaller places will suffer the most. I would tend to lean the opposite way....that the smaller places would thrive. Why? because it is their livelihood and a c-suite conglomerate is not protecting his/her bottom line by selling off locations or selling outright. I believe the smaller places are where the investments is at....now is the time to go grab those small shops and help them expand. I think of places to CAVA or ROTI, that are not yet franchised but provide fresh and healthy alternative fast food.

Furthermore, with the immediate concern of dine-in, the smaller places have always provided and are more efficient at take-out, which also equals less $$$ per. sq/ft.

[Typical Lax Dad]

What concerns me about this squeeze on restaurants is not the shift to more meals at home, but rather that the restaurants most likely to be crushed will be the smallest players, those which represent the most diversity of menus. Do we really need more Big Macs or KFC's or TGIF's? No. We could use a lot less! But entrepreneurs introducing new cuisines, flavors, to our palates...that's a real loss, I think. Likewise, I think there's real value to unique 'entertainment' venues for us to enjoy, with food and libations a rich part of the experienc

Curious why you suspect that the smaller places will suffer the most. I would tend to lean the opposite way....that the smaller places would thrive. Why? because it is their livelihood and a c-suite conglomerate is not protecting his/her bottom line by selling off locations or selling outright. I believe the smaller places are where the investments is at....now is the time to go grab those small shops and help them expand. I think of places to CAVA or ROTI, that are not yet franchised but provide fresh and healthy alternative fast food.

Furthermore, with the immediate concern of dine-in, the smaller places have always provided and are more efficient at take-out, which also equals less $$$ per. sq/ft.

How will the small shops survive with a 33% to 40% cut in revenue in many places?

[MDlaxfan76]

What concerns me about this squeeze on restaurants is not the shift to more meals at home, but rather that the restaurants most likely to be crushed will be the smallest players, those which represent the most diversity of menus. Do we really need more Big Macs or KFC's or TGIF's? No. We could use a lot less! But entrepreneurs introducing new cuisines, flavors, to our palates...that's a real loss, I think. Likewise, I think there's real value to unique 'entertainment' venues for us to enjoy, with food and libations a rich part of the experienc

Curious why you suspect that the smaller places will suffer the most. I would tend to lean the opposite way....that the smaller places would thrive. Why? because it is their livelihood and a c-suite conglomerate is not protecting his/her bottom line by selling off locations or selling outright. I believe the smaller places are where the investments is at....now is the time to go grab those small shops and help them expand. I think of places to CAVA or ROTI, that are not yet franchised but provide fresh and healthy alternative fast food.

Furthermore, with the immediate concern of dine-in, the smaller places have always provided and are more efficient at take-out, which also equals less $$$ per. sq/ft.

Fundamentally, the large players have much more access to capital, not just normally but also, quite notably, in the CARES Act. They have far more access to technology and can amortize all sorts of investments in such across their entire platform. This includes being able to stand up drive-thru, delivery options, connections, digital ordering, and marketing.

This doesn't mean that I WANT this to happen, I just predict that's going to be the reality in this crunch. And the crunch is going to sustain way past when other businesses recover to profitability. BTW, I also would predict a drastic reduction, ultimately, in the independent, small chain grocer arena as well. The ante on technology is going to change that landscape too. There will be survivors in those markets, and indeed there are those who will either be lucky in their location or hustle successfully in their adaptability. But overall, we're going to see the bigger, better capitalized businesses make it.

There's a really terrific reality show, Bar Rescue, that I would recommend to anyone looking at restaurant/bar microeconomics. For instance, fascinating how the changes in # of table tops (and other adjustments) can make a world of difference between success and failure. And here we are saying that restaurants will need to operate with half the # of table tops for the foreseeable future.

Not to be overly political, but the CARES Act really didn't get to the small players as intended, nor remotely enough in this particular sector. And there's simply no way that these businesses are going to be able to bring back the same # of workers in July without that killing their business. The program needs adjustment fast. That is, unless we just say that those dollars are flushed.

I do have longer term optimism for the entrepreneurial restaurants at each price point level, but we're looking 2-3 years out.

[MDlaxfan76]

Now, there's whole other retail sectors, apparel, electronics, furnishings, etc where I think we're going to see lots of bankruptcies due to high leverage on many of the traditional large players as well as the small players.

We're going to see a rather radical shift in how we purchase many such goods going forward. Department stores are going to be crushed, already happening.

Some of this disruption is just fine in the long run. But because it's happening so fast, we face some really serious issues with employment in all these sectors, not just for a few months, but permanently. Even if we had a V curve recovery rather than the far more likely wide U. These forces are getting accelerated fast, and they eliminate jobs.

Though Fed Chair Powell appears to 'get' all this, I think there's immense amount of denial and wishful thinking going on, largely driven by partisan wishful thinking related to the 2020 election cycle.

That's unfortunate, as this really requires bi-partisanship to manage through.

[ardilla secreta]

All restaurants will suffer in the short term, but it will be severe for the small independents that rely on family, friends or wealthy benefactor capital. The chains backed by publicly traded or venture capital will be better suited to survive. Will probably be able to get better prices on wholesale goods with less competition.

Eating out may not be best for health, but the real issue, be it at home or in a restaurant, is how Americans eat. Emphasis of quantity over quality. Demanding food out of season, like the pale, wretched Florida tomato. Demanding the same basic cuts of meats instead of experiencing flavorful rustic cuts. At home or away so much of our food is processed. Menus are ridiculously long.

Perhaps this episode will be the beginning of restaurants going to prix-fixe or market menus with just a handful of sustainable choices that are much easier to control costs/waste and provide more interesting selections. But that ain’t happening nationwide because most Americans want cheap food and plenty of it.

Years ago in SF a friend was cooking under renowned chef Loretta Keller at her bistro, Bizou. Anybody here ever heard of her? Her signature dish was beef cheeks a la Sainte-Menehould. Back in the 90’s nobody was using beef cheeks, so she was able get cases of them for nearly nothing and turn it into something desirable and profitable to boot. That’s what trained and creative chefs do.

Dining out, and fine dining doesn’t have to be 5 star dining, but finding the regional gem that knows what they’re doing, is one of the most sociable things this feller could do. I love the interaction with friends, the staff and sometimes other customers. What’s not interesting to me is stuffing my face with all you can eat whatever.

[youthathletics]

What concerns me about this squeeze on restaurants is not the shift to more meals at home, but rather that the restaurants most likely to be crushed will be the smallest players, those which represent the most diversity of menus. Do we really need more Big Macs or KFC's or TGIF's? No. We could use a lot less! But entrepreneurs introducing new cuisines, flavors, to our palates...that's a real loss, I think. Likewise, I think there's real value to unique 'entertainment' venues for us to enjoy, with food and libations a rich part of the experienc

Curious why you suspect that the smaller places will suffer the most. I would tend to lean the opposite way....that the smaller places would thrive. Why? because it is their livelihood and a c-suite conglomerate is not protecting his/her bottom line by selling off locations or selling outright. I believe the smaller places are where the investments is at....now is the time to go grab those small shops and help them expand. I think of places to CAVA or ROTI, that are not yet franchised but provide fresh and healthy alternative fast food.

Furthermore, with the immediate concern of dine-in, the smaller places have always provided and are more efficient at take-out, which also equals less $$$ per. sq/ft.

Fundamentally, the large players have much more access to capital, not just normally but also, quite notably, in the CARES Act. They have far more access to technology and can amortize all sorts of investments in such across their entire platform. This includes being able to stand up drive-thru, delivery options, connections, digital ordering, and marketing.

This doesn't mean that I WANT this to happen, I just predict that's going to be the reality in this crunch. And the crunch is going to sustain way past when other businesses recover to profitability. BTW, I also would predict a drastic reduction, ultimately, in the independent, small chain grocer arena as well. The ante on technology is going to change that landscape too. There will be survivors in those markets, and indeed there are those who will either be lucky in their location or hustle successfully in their adaptability. But overall, we're going to see the bigger, better capitalized businesses make it.

There's a really terrific reality show, Bar Rescue, that I would recommend to anyone looking at restaurant/bar microeconomics. For instance, fascinating how the changes in # of table tops (and other adjustments) can make a world of difference between success and failure. And here we are saying that restaurants will need to operate with half the # of table tops for the foreseeable future.

Not to be overly political, but the CARES Act really didn't get to the small players as intended, nor remotely enough in this particular sector. And there's simply no way that these businesses are going to be able to bring back the same # of workers in July without that killing their business. The program needs adjustment fast. That is, unless we just say that those dollars are flushed.

I do have longer term optimism for the entrepreneurial restaurants at each price point level, but we're looking 2-3 years out.

I use to to watch Bar Rescue all the time and the one takeaway was that alcohol was where the profit was, along with managing POS with alcohol, couple not having either of those two with skimming and you could sink. Why? b/c the margins on the food where so small. This is why I argue that small shops will be fine.....because many of those mom and pops and new creative startups are small and do not rely on alcohol sales.

I suppose I could be wrong since this is not my bread and butter, but I know a few of those small shop owners and they are actually faring quite well. Volume is actually up...why? because people are not sitting and occupying a table for 45-90 minutes. In our area, there are lines of cares waiting their turn for the 'food runners" to hand deliver to the car.

Is it sustainable? I suppose, but I tend to believe many restaurateurs love the hospitality of people in their chair, the social engagement, etc, etc. Just making everything to go could wear on ya when you are a people person, could make it easier to just throw in the towel.

[a fan]

For the record, John Lafferty is a laughing stock in the high end hospitality industry. He barely knows how to make a manhattan, and wouldn't know a pilsner from a stout. There are pages devoted to actual bar operators tearing his advice apart.

Thought you'd get a kick out of this.

And yes, all the profits are in spirits, much more so than beer or wine.....yet there are precious few operators who know this. If they did, they'd pore over their spirits menus with a magnifying glass, instead of handing it over to some kid in their 20's, and hoping they know what they're doing. Because they rarely do.

It's pretty much impossible to tell what the future holds for restaurants. You don't know when social distancing will end, and you don't know who is getting what in terms of bailouts. My brother and I have completely ignored trying to guess what's going to happen, and who will survive. It's impossible to tell on a micro level. It's all heartbreaking, I can tell you that much. I wish I had the capital to lend out to keep Colorado restaurants afloat.

You can't tell when social distancing will end, and when folks will feel comfortable in confined spaces again. Could be next week. Could be next year. I have absolutely no idea. And without that piece of information? Forget trying to work out who will survive, and who won't.

Edit to add------maybe Taffer's show has changed. I just remembered the criticism I described was yeeears ago. So take what I said with that in mind.

[CU88]

Congressional Budget Office now forecasting 38% decline in GDP in Q2, with 26 million fewer people employed in the quarter than in the fourth quarter of 2019.

Strange, o d says economy will come roaring back this summer?

[MDlaxfan76]

For the record, John Lafferty is a laughing stock in the high end hospitality industry. He barely knows how to make a manhattan, and wouldn't know a pilsner from a stout. There are pages devoted to actual bar operators tearing his advice apart.

Thought you'd get a kick out of this.

And yes, all the profits are in spirits, much more so than beer or wine.....yet there are precious few operators who know this. If they did, they'd pore over their spirits menus with a magnifying glass, instead of handing it over to some kid in their 20's, and hoping they know what they're doing. Because they rarely do.

It's pretty much impossible to tell what the future holds for restaurants. You don't know when social distancing will end, and you don't know who is getting what in terms of bailouts. My brother and I have completely ignored trying to guess what's going to happen, and who will survive. It's impossible to tell on a micro level. It's all heartbreaking, I can tell you that much. I wish I had the capital to lend out to keep Colorado restaurants afloat.

You can't tell when social distancing will end, and when folks will feel comfortable in confined spaces again. Could be next week. Could be next year. I have absolutely no idea. And without that piece of information? Forget trying to work out who will survive, and who won't.

Edit to add------maybe Taffer's show has changed. I just remembered the criticism I described was yeeears ago. So take what I said with that in mind.

It'd be interesting to hear your take on the shows after you watch a handful, a fan, given your knowledge. Undoubtedly some BS, but sure looked quite analytical to me on getting the right mix of dynamics. And yeah, table tops and turnover, at least for food oriented spots.

And wow, those are some disgusting kitchens when he shows up!

[a fan]

The grief Taffer gets isn't for what (I know, it sounds stupid) they call "BarMetrics"....maximizing pour costs, number of spots at bar, etc.

It's that he knows next to nothing about beer, wine, and spirits. The shows I watched in the first couple of seasons were really bad in that regard. Hard to call yourself a bar consultant when you don't know anything about what the bar is selling.

He also leaves out all the borderline illegal things that really make a bar profitable. Cases of booze that "fall of the truck" from the distributor. Big Booze showing up with their corporate card to pay a few grand for "group party" that never happens. THAT is how you make a bar really profitable.

It sucks for little guys like, but that's what keeps these places open.....