Aseahawkfan wrote:Thanks for the info, RD.
Fast food stays pretty strong in good and bad economies. Fast food is always cheaper than eating out and for people who don't like to cook a lifesaver. With inflation driving prices up and employment as high as it is, seems I could see fast food demand staying high for a while. If LW is growing internationally, that could be a big driver of growth.
I'm surprised they didn't give you any stock options. Maybe they went public only recently or had some kind of merger.
RiverDog wrote:It didn't used to stay strong in good and bad economies. Back in the 90's prior to the Gulf War when gas prices skyrocketed, we were shutting down lines and laying off people. Fast food is discretionary spending and one of the first things that families cut when money is tight. They don't travel and the traveling they do is closer to home, so they don't eat out.
But that seemed to have changed in this past recession. As a rule, with gas prices going to unprecedented heights, you would have thought that it would have deterred people from traveling, but that didn't happen, which is one of the reasons why gas prices kept going up, because people didn't cut back on their traveling. Is it just because of such pent up demand after Covid or does it signal a permanent change in consumer habits? People had more money during this recession due to all the freebie handouts the government gave out.
Hawktawk wrote:My buddy Dale just retired as an MCD owner operator . He and his buddy Chuck had 7 stores and I would bet the corporation is one of lamb Weston’s biggest customers . He said that during the pandemic they went curbside and window and they never made more money in their lives . Many of their current practices retain some of that innovation along with things such as kiosks for ordering taking over humans more and more . They haven’t skipped a beat with inflation etc , at least their stores and he anticipates the demand for fast food is more permanent and stable then before .
NorthHawk wrote:I read an article a number of years back that pointed out that in the last recession or downturn the companies that were most successful were lower priced restaurants and places like dollar stores.
It makes sense as people still want to go out to eat sometimes and they have to live so getting the necessities of life at a lesser cost becomes a life strategy for more people than in good times.
NorthHawk wrote:I was mostly adding to the idea that LW would benefit by a downturn in the economy as people still want to go out to eat, but more will be downsizing their spending which
means more sales to restaurants like McDonalds and others.
RiverDog wrote:In past economic downturns, any gains in midweek fast food sales, ie people still wanting to eat out but being more conservative in doing so, was offset by a dramatic decline in weekend sales, a reflection of people traveling less.
However, that relationship may not be applicable in today's environment as people still have money and aren't worried about losing their jobs.
RiverDog wrote:In past economic downturns, any gains in midweek fast food sales, ie people still wanting to eat out but being more conservative in doing so, was offset by a dramatic decline in weekend sales, a reflection of people traveling less.
However, that relationship may not be applicable in today's environment as people still have money and aren't worried about losing their jobs.
Aseahawkfan wrote:Why did you guys have such a big downturn in the 90s? I mostly remember the 90s as good economic times under Slick Willy and a conservative Congress with massive stock market growth that preceded the bubble that popped in the early 2000s.
RiverDog wrote:That's been a long time ago, but as I remember, the price of oil had a huge run-up after Sadaam Hussein invaded Kuwait in 1990.
The 1990 oil price shock occurred in response to the Iraqi invasion of Kuwait on August 2, 1990,[1] Saddam Hussein's second invasion of a fellow OPEC member. Lasting only nine months, the price spike was less extreme and of shorter duration than the previous oil crises of 1973–1974 and 1979–1980, but the spike still contributed to the recession of the early 1990s in the United States.
https://en.wikipedia.org/wiki/1990_oil_price_shock
As I stated earlier, our industry fluctuates with the price of gas as it flourishes when people travel, suffers when they don't. Or at least it did back then.
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