A celebrity chef told a bevy of CNN anchors last week that restaurant customers sense “we’re on the brink of a really bad economy here.”
Celebrity chef Bobby Flay appeared on CNN This Morning on Friday and spoke with hosts Kaitlin Collins, Don Lemon and Poppy Harlow. He said from what he’s seeing in his restaurants, lean times are ahead.
This view is shared by experts including Jeremy Siegel, a professor at Wharton Business School.
If interest rates stay where they are next year, Siegel said in an interview with Insider last week, the country is in an even worse economic position than it was after the housing market collapsed in 2008.
It will “cause the second largest housing market meltdown in the post-war era,” Siegel told Insider. “Real estate prices will fall by 10 to 15 percent from their peak. If they continue this higher up, it will only get worse.”
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Siegel also said policymakers have committed “gross negligence as stewards of our monetary system” by doing too little too late to address inflation.
“They exploded the money supply in 2020. When did we really start seeing inflation? Late 2021. Now we’re only six months into the tightening cycle. And they’re like, ‘Oh my God, it’s not working. It doesn’t work We have to keep hiking.” I am stunned.”
Flay said restaurants exemplify how that translates to everyday life.
Chef and restaurateur Bobby Flay: “The thing about restaurants is that they have a focus group every night about how people think about the economy.”
“We’re being squeezed all over the place… We’re on the brink of a really bad economy here… experienced that before.” pic.twitter.com/lAn5kullkd
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“The thing about restaurants is that they have a focus group every night about how people think about the economy. And what’s happening is it’s being crushed by all sorts of rough edges,” he said.
“Labour is expensive, raw materials, that is, you know, the cost of goods, food, etc. is expensive. And, of course, occupancy costs are always expensive. The landlords never look out for you. They’re always – they have very deep pockets and they won’t – they don’t take the pressure off,” he said.
Flay said that in addition to their personal circumstances, Americans are aware of broader economic news.
“On the other hand, I think consumers are also feeling the pressure because they’re turning on the TV, they’re looking at social media, and they understand that we’re on the brink of a really bad economy here,” he said.
“And that’s how people tighten their wallets,” he said.
The body language of the hosts – Lemon in particular – was easy to read. Apparently, they were uncomfortable with Flay’s message — and the implications it had for the Democrats who control the US government ahead of Tuesday’s midterm elections.
Harlow asked if Flay agreed with American concerns about the economy.
“I do,” he replied.
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“Listen, unfortunately I’ve been at this long enough to see that this has happened before and ultimately we can get out of it, but you have to hold on. I have a feeling that something not good is happening. I mean you look at all the reports and I watch what people are doing – how people are behaving in the restaurants.”
“So the person who bought a $75 bottle of wine last week might buy a $40 bottle of wine this week. They’re making decisions that actually depress the check averages at the restaurants,” he said.
“And you understand exactly that, you know, that makes it very, very difficult. On the other hand, the restaurateur, owner, has a hard time making a profit,” he said.
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