Restaurants and Institutions

I agree with everything you say Chris. So much so that I'm now interviewing with companies outside the restaurant industry in order to at least TRY to protect myself considering the current climate.

I completely disagree with everything you said (apart from the "givens"). You provide no stats, figures, or any kind of information to back up your claims. Accordingly, we should all assume they are purely fictional. Banks right now are making lots of money off interest from credit card debt; why would they take cards away that are providing a revenue stream for them? The damage being done right now to banks and other financial institutions is coming from real estate assets and falling home prices. I would love to see evidence otherwise.

I also completely disagree with everything in the article. Under "For Your Customers", point number 5 in no way logically follows from points (1) through (4). In addition, to claim that we are gonig to return to a 1970/1980's way of doing business is absurd. Shall I go back to a woodburning stove and waiting up for the milkman while I'm at it. I can't believe this got published. Consumers and firms need to learn to live within their means and not rely on government bailouts.

Nonesense, it's 2008 not "70's and early 80's."

And being back in a cash business would be bad? All things adjust!

I absolutely disagree with everything in this article. To suggest that everyone is going to revert to doing business as we did in the 70's and 80's is not only baseless and unsupported, but also completely absurd. That's like saying due the downturn in the recording industry, we're going to scrap the iPod and go back to the LP or 8-Track tape. Why would banks take peoples credit cards away when that's the way they make money. This article makes no sense and I can't believe such utter nonsense got published.

I disagree with your outcomes, and as for your first 3 points under "For Your Customer," those points are probably GOOD things. People with bad or unhealthy credit scores should not have credit cards in the first place. And why do we need $10,000 limits (or more) on credit anyway? Maybe if people had low limits, then your avg. consumer wouldn't get in credit debt in the first place!

I love the fact that an American Express add is on this page. Are they really expanding?

There is simply a trickle down effect for everyone, no matter what the consumer decides to cut their spending on. Frankly, being in the rest. biz, I think you are a bit exaggerated in your predictions.

A lot of the above comments reflect that there is little knowledge about what is actually going on in the credit card arena already. Banks have already tightened limits, cancelled cards, and raised rates. Delinquencies on credit card balances has increased to 4.5% the highest since 2004 and the amount of $ being made by the credit card companies has decreased due to the shrinking of excess spread due to an increase in the cost of funds the credit card companies have to pay. These statistics come from Barclays Capital US Consumer ABS performance monitor as of the end of September 2008. As the Capital Markets dry up and the cost of funds to the credit card companies increases, they are not being paid to take the "subprime" risk of a below 640 FICO score.

Now I know how to get articles published just write a SCI-FI article that scares everyone and your in. This is market correction its been coming for three years wake up.

I disagree with the info also. Very weak! We have to hold on tight to what is happening in the industry.

I believe you're being an alarmist. I come from the perspective that you shouldn't be spending money if you can't afford it, and it's irresponsible for an industry to condone having people overextend themselves just to subsist. Also, you shouldn't be running your business so strapped for cash that it will go under if people who can't afford to pay for your services/goods are denied the ability to overextend themselves in order to pay for these services/goods. Perhaps I'm a dinosaur but that's my take on things.

I cannot beleive this would be published....uninformaed and negative.

Those that can't do.... "Chris Muller teaches on the topics of multi-unit restaurant management, branding and growth at University of Central Florida's Rosen College of Hospitality Management."

I can't believe I took the time to read this...I thought you had something I could learn from...I owned restaurants in the late 70's and to this day...Your report is to say the least inaccurate ..and to say the most, probably the biggest crock of s%^t I've seen in a long time.."Cry Wolf" somewhere else please..Us restaurant owners have enough to worry about...but thanks for trying to add to it....

Chris, this is the type of sensationalist crap that the media tosses about, thinking they are cleaver and people will want to read their B.S. hyperbole. I am amazed that a restaurant industry blogger like you would have such a negative view of our future. Try being supportive. Over at FohBoh, they are actually trying to rally the industry with positive discussions while not burring their heads in the sand. The 70's and 80's are history and there are so many macro and micro economic factors that no longer exist that it is dumb to even mention.

Thanks to all of the comments. My objective is not to suggest we return to the "old days" but instead to acknowledge that the institutions we rely today on are going to change the game. My Blog posting today "The Cigar Box Solution" offers a set of suggestions to operators to prepare to weather the coming storm. Please go check it out. As for being alarmist or negative. All you have to do is read any of the world-wide financial and economic press to see that everything I suggested is truly likely. Whether you read the Wall Street Journal, listen to the National Restaurant Association, watch FoxNews or CNBC, it is uniformly understood that the credit crisis is real, and will not be forestalled by the current voting in Congress. The "Credit Economy" is in complete lockdown and the restaurant on Main Street will feel it soon enough. If you want to believe things will be the same as they were a few months ago, that's your choice. I stand by every prediction. (Just for the record, I've owned or operated restaurants--some succesful some not--for over 30 years, going back to the bad old credit days of the '70s)

i can't diagree more! banks are already taking more than their "fare share" from the average restaurant operator and for years i have suggested that we begin to take checks as the cost of accepting cards vs. check recovery costs are now unfavorable. the people that have led us to this point in the financial arena are the ones that need to pay. if you have a mrtgage that you cannot afford and you loose your house, so be it, as you have to know that you can't buy a $250,000 house for $600 a month. this is another example of a government program that set out to do good and did, and then ran amuck while the boys and girls in washington were asleep at the wheel. and now THEY want to fix it, please!!!

Don't be such douchebags. He rocks, and is a fantastic leader in the industry. Don't mess with god, or should I just call him Chris Muller.

I can speak only for my company, but we will not be raising our clients rates for processing. We will still be offering no per-transaction fee and no surcharge for corporate/rewards/nonqualified card programs, as well as free gift card processing. Visit flatratesolutions.net if you're interested in dumping credit card processing and switching to flat rate processing.

I was inbusiness in the 1980's and did not feel the recession. However i will say it was very tough to get started. It was a different business and it grew like a weed. I sold it in 1990. I opend my cafe two years ago and I must say timing is not good. however I have seen a reduction in the use of credit cards and in increase in debit cards. Days I do not even have to go to the bank with a cash bag. I wish I could be a cash business. My father is and mother who owns a grocery store is cash only. He seems not to have money worries.