Our student operated restaurant lost about 50% of our business starting a month ago. At first I thought it was something we had done or were failing to do. We adjusted our menu to create more teenage friendly meals such as Southern pan fried chicken and made from scratch Pepperoni pizza. We lowered our prices. We offered "value meals" combining a plated special with a small beverage. We gave our run of the mill flame grilled burgers a "face lift" by offering specialty burgers such as a double bacon cheese burger or "meat lover's burgers" (chicken fried steak, bacon, cheese, and a flame grilled burger). We even acquired a large capacity blender and began introducing milk shakes.
Business went up 30% but try as we might, we're still down 20% in daily sales from where we were over a month ago.
In talking to local restaurant owners, I've come to understand that it's the economy. While the rest of the country is talking about a recession, my local area is headed for a depression.
The local copper mining company is suffering because with worldwide reduced industrial production, there is less need for copper. Last month, all contractors were laid off. Last week, 400 employees were also let go. Word is out that the mining company will still be cutting employees and the ripple effect through the local economy has been horrendous.
Retail sales are down. Seasonal employers like Wal-Mart are hiring at vastly reduced rates. People aren't eating out as much as they used to. In my case, parents are either packing brown bag lunches for their kids or since high school kids have an hour off for lunch, the kids are simply going home for a quick meal.
Some of our local businesses have already failed. Others will probably fail unless our overall economy starts to recover ... but with a global recession, I don't think we'll be recovering any time soon ... so it's going to get a lot worse locally before it gets better.
As bad as it is here, can you imagine what will happen if the big three automotive companies go down? Central Michigan will be hit worse than it was in the early 80's. I remember seeing bumper stickers back then that read, "Will the last person leaving Michigan please turn out the lights?"
When the automotive industry slumped in the early 80's, there was a huge ripple effect through the state economy. Supermarkets, retail stores, parts suppliers, and so forth were shutting down. As families moved away, entire schools were closed down and teachers were laid off.
The automotive industry is now talking about bankruptcy. GM is said to only have enough cash reserves to last for a few more months. Although a bankruptcy won't necessarily kill these companies, (consider the precedent of Pan Am and United Airlines which also went bankrupt but are sill operational), a bankruptcy will still have a huge impact on the economy.
I'm really quite thankful to be a culinary arts teacher. Since our restaurant is non-profit, I only need to break even on food production costs.