Fitch: Risk for Restaurants Moderating

According to a news report from Nation’s Restaurant News, “Despite continued weakness in same-store sales growth for nearly all U.S. restaurants, corporate financial risk and bankruptcy fears for leveraged companies are moderating, according to a Tuesday report from Fitch Ratings, a corporate credit rating agency.”

“Cost controls, including aggressive expense reductions, eased commodity costs and decreased capital spending, have helped companies contain further deterioration of cash as sales growth still remains elusive, the report by Fitch Ratings analyst Carla Norfleet Taylor said.”

“’Most operators remain cautious on the outlook for the consumer and the broader economy, and are therefore making balance sheet management and liquidity a priority,’ the report stated.”

“Operators are more effectively managing labor expenses by reducing hours worked, using less costly cuts of meat, minimizing waste, offering less free bread and cutting back on condiments, the report highlighted,” the story said.