Steakhouse Index

A “steakhouse index” gauges the health of an economy by the health of its steakhouses. If an economy is doing well, businesses entertain clients at steakhouses; if an economy is doing poorly, people cut down on expensive steakhouse restaurants.
 
“The Steakhouse Index” was published by Daniel Gross in Slate on May 29, 2007. “The Steakhouse Index”—this time looking at the financial health of New York City’s steakhouses—was published in Fortune magazine on September 6, 2013.
     
 
Slate
The Steakhouse Index
Their stocks are down. Should we worry about the rest of the economy?
By Daniel Gross|Posted Tuesday, May 29, 2007, at 7:20 PM
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A look at the six-month chart of the same stock and the S&P 500 shows how the steakhouses could function as economic indicators. Note the outperformance in the first quarter and the underperformance in the second quarter. Steakhouses thrive on expense accounts. Their sales are tied to the exuberance of (mostly) men in the corporate world, and their business is largely discretionary. (It’s easy to lose sight of just how expensive steakhouses are. At the Michael Jordan steakhouse in New York, for example, a dinner of shrimp cocktail [$16.50], New York Strip [$38.50], hash browns [$7.50], and creamed spinach [$8.50], plus dessert, wine, tax, and tip easily tops $100 per person.) Their outsized sales and stock performance in the early part of the year are lagging indicators, as bonuses are paid out and entertainment budgets are set based on the prior year’s performance.
 
But as the year unfolds, steak stocks become more like leading indicators. If profits are humming, M&E budgets are in rude health, and prospects look good, you’d expect businesspeople to use steakhouses for meetings, deal-closing dinners, and recruitment lunches. When business slows down a lot—as it has in many sectors of the economy—it becomes much harder to justify a $250 lunch for three. Wall Streeters and hedge-fund guys may still be splurging for Kobe, but think about all those real estate and mortgage brokers, car dealers and consumer products salesmen, retailers and contractors who may be nibbling on takeout burritos because of slowing demand.
 
Nashville (TN) Post—PostPolitics
The Outback Steakhouse Index Of Economic Indicators
Published June 30, 2008 by Kleinheider
Tim Chavez judges our economy based on a driveby of a restaurant featuring the ultimate in faux-Australian cuisine: ...
 
CNNMoney—Fortune magazine
The Steakhouse Index
By Shawn Tully, senior editor-at-large September 6, 2013: 5:00 AM ET
What the sizzle at some legendary chophouses says about the New York economy—and maybe the nation’s, too.
FORTUNE—To gauge the striking revival in the Big Apple’s economy, you could pick from a wide variety of statistics or symbols, from the ascending graph of Manhattan coop prices to the throngs of foreign tourists packing the 7 subway line to the U.S. Open. We modestly suggest a more telling barometer: what we’ll call “The Steakhouse Index.” That’s our take on how those great, extremely pricey, expense-account-sensitive purveyors of prime aged beef and creamed spinach are faring a half-decade after the onset of the financial crisis.
 
This writer’s survey is more atmospheric than scientific, as it consists of witnessing the traffic and ambience while dining in late August at three renowned Midtown steakhouses and interviewing their owners and maître d’s. The institutions, ranking among the top-grossing restaurants in America, are Del Frisco’s (DFRG) Double Eagle Steak House, the ultimate hangout for financial power-players across from Rockefeller Center; Porter House New York, a virtual neighborhood canteen for the corporate elite in the Time Warner Center at Columbus Circle; and Smith & Wollensky, a bastion of tradition in a turn-of-the-last-century, white-and-green lattice home at the nexus of the ad industry on Third Avenue.
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The sizzle is back for two reasons. First, big banks, ad agencies, and law firms are finally, though judiciously, re-loosening their wallets for entertaining. Second, hordes of affluent foreign tourists, lured by the weak dollar, are filling tables on weekends and late at night following an evening at a Broadway show.