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Romano’s Macaroni Grill – A Food-Chain Nose Dive

Touch the Soil News #844 (Feature photo – Macaroni Grill Restaurant – Vercilio CCA SA 3.0) Economic news is often slanted towards the ever elusive dream – the economy is improving. The story of the restaurant chain – Macaroni Grill – is stellar in its collapse. The chain at one time had around 230 locations, but its decline has hit rock bottom this week. Here are the highlights of the fall: In August of 2008, Macaroni Grill had a deal to sell 80 percent of the chain to Golden Gate Capital for $131.5 million. The deal did not happen. Within months, Golden Gate Capital bought its 80 percent of the…

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Food Chain – Signs of Deflation?

Touch the Soil News #813 (Feature photo – Michael Rivera – CC SA 4.0) As consumers, we often think that a primary measure of the success of capitalism is a low – and easily affordable price. But how low can prices go and still keep the family employed? Deflation is when the price of something keeps going down and down. In its chronic state, a collapse in prices is what brings on a great depression. It’s a spooky spiral in which wages go down and then prices go down to catch up with lower wages, which means wages and prices must go down again in an attempt to catch up.…

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Is Competition Really That Wasteful?

Touch the Soil News #525 In this era of less-than-abundant natural resources, it is not unusual to see vacant lots and perfectly good buildings sitting idle and just going to waste. Unfortunately with the emergence of idle facilities also comes the demise of jobs and companies that were occupying those facilities. As we have always said, the food chain is one of the more interesting places to gain economic insights about our lives and economics. Rather accidental, a handful of statistics about the restaurant sector has come into our hands that weigh in on the vacant buildings in cities. In recent months, 10 companies overseeing 17 restaurant chains have filed…

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The Economics of the Food Chain Don’t Lie

Touch the Soil News #504 We often hear the economy has rebounded and improving. However, when it gets down to it, the economy runs on paychecks that leave folks with some spending power above the basics. The restaurant industry is the first to feel a recession as purchasing power among the masses weakens. And 2016 has not been nice to restaurants. Two thirds of all restaurant company stocks have fallen so far this year with the average decline at 8.3 percent. The cause of the drop in stock values comes from declining consumer spending at restaurants. This softening of spending has precipitated the largest wave of restaurant bankruptcies in modern…

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