Small restaurant chains predicts difficult days

Small restaurant chain owners, who were hit by the current US economic slowdown, reported weak quarterly results, and their forecasts point out that any relief from current unfavorable market trends may not be near.

More and more consumers have been cutting back on their visits to restaurants in the United States as a worsening economic downturn and a weak job market push people to cut back on activities such as eating out that involve huge spending.

McCormick & Schmick's Seafood Restaurants Inc named a difficult business environment for its weak quarterly results and fourth-quarter outlook.

Ruth's Hospitality Group Inc, owner of Ruth's Chris Steak House Inc, said its previously announced forecast for 2008 "is no longer a realistic goal," and also refrained from giving outlook on the next quarter.

Many restaurants decreased revenue

October same-store sales for Ruth's Chris restaurants were down about 15 percent, while McCormick & Schmick's saw a 10 percent fall.

Chicago-based Morton's Restaurant Group's similar revenue and forecast followed in the same vein.

Comparable revenue for Morton's steakhouses decreased 7.6 percent for quarter ended September 28.

Only smaller competitor Rubio's Restaurant Inc managed to resist the trend. The company's quarterly profit topped market estimates by 2 cents, propped up by higher restaurant sales and lower operating margins.