What’s causing fears over a “restaurant recession”? And what should you do to protect your restaurant?

This summer, industry analysts explained how lackluster restaurant industry performance “reflects the start of a U.S. Restaurant Recession.” It’s a strong, even frightening, statement, but what’s behind the prediction?

Wall Street points to high supply as a key factor in this analysis—there are simply more restaurants open today, and many of these are smaller operations fighting for consumers’ wallets. Growing labor costs are further eating into restaurants’ margins, forcing prices up and restaurant traffic down.

Lunch has taken the biggest hit, with a 4% decline in traffic. In quick-service restaurants, lunch runs consumers about $8 for a meal that they typically don’t “want to invest a lot of time, money, or energy.” Combine that with lower grocery store prices and a significant rise in the number of telecommuters, and it’s easy to see what’s driving people to brown bag lunches.

Investing in loyalty and productivity can help future-proof your business

Whether we’re entering a “restaurant recession” or not, it’s a good reminder to take a hard look at your restaurant’s financial position, consider investing in a growth strategy and look for ways to drive productivity and efficiency in your operation. A capital advance can help you turn some of these strategies into realities, giving you quick access to funds you need to invest in productivity-driving technology, creating a customer loyalty program, or uncovering new customers with a new marketing program. Shore up your financial position now, and you’re ready for whatever the economy has to throw at you.