Summary
Discounts will drive traffic but what happens when you stop? Economic conditions along with cannibalization have hurt this industry tremendously. What chains are in trouble?
Analysis
Sometimes when companies start discounting they will be hurt when they stop as customers will not frequent their establishments unless they are given discounts of some kind. A lot of Franchises are being hurt by corporate companies driving the BOGO's, discounts, and other incentives to bring in customers.
The headwinds are strong going forward and only the financially strong will survive. Discounting has a huge impact on earnings and I am afraid some companies will have to start closing restaurants.
Something is going to have to give soon, and with hurricane season on the horizon and the unrest around the world with oil; we cannot afford gas going to $4 a gallon especially in this enviroment.
I encourage all people living in the U.S. to vacation here and spend their money here and not abroad. We need to get this economy up and running, and this will help tremendously.
