31 Jul 2020
Restaurants are to face a challenging future, CNBC’s Jim Cramer stated on “Mad Money,” as he claimed, “Welcome to the restaurant apocalypse.”
After listening to Yum Brands’ conference call, who reported a double-digit decline in same-store sales last quarter, Cramer said, “If you’re in the business of serving people food in a brick-and-mortar setting, all I can say is stick a fork in it, because that business is done.”
Standing out was Pizza Hut, which saw its U.S. sales increase by 1%.
Pizza Hut, KFC and Taco Bell are only some of the restaurants owned by Yum Brands, posted a 15% drop in sales during the lockdown period.
“Yum is the largest restaurant company on earth. Pizza Hut’s their largest division, and it might not need dining rooms at all. After listening to the protocols they have had to put in place to keep a few dining rooms open, it might not even be worth the effort.”
Cramer claimed that businesses which depend on on-premise diners will struggle during this time, as governments are limiting the capacities of public places.
“That terrifies me because I’m in the restaurant business and most of us smaller operators simply are not built around takeout, “ the “Mad Money” host said.
“Unfortunately, your favourite sit-down restaurant probably can’t survive on delivery alone. I’m not saying they’ll all go under, but that restaurant that you like had better be a labour of love for the chef, because after listening to the Yum call, it’s clear that the brick and mortar restaurant biz has no way to turn a profit in the age of Covid.”
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