Is ObamaCare Tanking Restaurants?
Welcome to our pity party! Sit anywhere you like. There’s always plenty of room. After all, we hardly see any customers these days (in any of our restaurants). It’s been like this at least since May.
Is business hurting? Pffft, yeh-aah! Sales nose-dive even when we’re promoting a free entrée with the purchase of one. We’ve also dropped the price of our already cheap Happy Hour menu — and there’s still no business to speak of.
Man, I just can’t figure why our sales suddenly dropped off so sharply and not come back. All of us in full-service restaurants along this main suburban drag are asking the same questions: Where the heck is the customer? And when will they return?
Good questions and great timing. CKE Restaurants CEO Andrew Pudzer provided an answer in today’s Wall Street Journal. In a word, the explanation is ObamaCare — the rising premiums part of it. Here, give a listen:
One doesn’t need to be an economist to see that ObamaCare is reducing consumer spending, resulting in a reduction in restaurant visits. Combined with the economic advantages of eating at home due to lower grocery-store prices, we are experiencing what you might call a government-mandated restaurant recession.
Pudzer then cites the numbers: While premiums climbed just 2 percent and 7 percent in each of the last two years, they will jump a whopping 25 percent in 2017. And even higher in some states. “Deductibles in some cases have doubled — or even tripled — to thousands of dollars a year,” he claimed, citing research.
That, he reasons, has helped caused traffic declines of “2.8% from the start of the year through September,” citing the Restaurant Industry Snapshot.
It is, of course, helpful to understand what the Affordable Care Act was intended to do. This summary is from ObamaCarefacts.com, an independent website:
The law aims to increase the quality, availability, and affordability of private and public health insurance to over 44 million uninsured Americans through its many provisions, which include new regulations, taxes, mandates, and subsidies. The law also works toward curbing the growth in healthcare spending in the US, which has been rising at an unsustainable rate.
Pudzer, apparently, doesn’t believe the law is working. Other people have different opinions as to the efficacy of the controversial program.
Interestingly, the CEO largely dismisses reasons others have suggested for the sudden downturn in restaurant visits. The most prominent is that grocery store prices have slid, making food-at-home noticeably more affordable than food-away-from-home. There’s also the matter of stagnant wages and the anxiety caused by a raucous presidential election, which at least two fast-food executives recently blamed for their sales and traffic shortfalls.
Speaking of presidential choices, now there’s a reason to take pity.