Dreamweaverrs Ponderings

With the bankruptcy filing of yet another chain of stores, another one bites the dust. It’s just one restaurant, one store, one place, no biggie, right? Wrong!

Bennigan’s filed for Chapter 7 bankruptcy. Chapter 7 bankruptcy is not a rearranging of finances to get out of debt by manoeuvring and twisting your business so you can fix it and start over. It isn’t starting with a clean slate. This is closing the doors, selling all your assets and bye bye , we are done. Not all their restaurants are closing their doors, but enough are that a lot of people are affected. In their case it is the company run restaurants that are closing their doors, not the franchisees. Nonetheless they are another business shutting down. Customers are not filling restaurants as much as they used to. You have to cut corners somewhere and dining out is definitely in the luxury category . People who are going out are often choosing less expensive meal choices, leaving smaller tips, bringing fewer people.

Now consider who is affected by this and follow the chain back. First the direct employees lose their jobs. The suppliers lose customers. The growers of the fresh produce lose a big customer. The local butchers and farms lose business. The local suppliers of things like paper goods for the bathrooms and tables lose buyers. The phone and power companies lose customers. The local gardener or groundskeeper who maintains the grounds loses work.  The printer who makes the menus and the local magazines and newspapers who run ads for the restaurant all lose business.  The day care person who watched the workers children loses customers. The janitorial company loses customers. The list goes on and on. It is a domino effect. Now each of those people affected has less to spend. It is belt tightening all around.

Go back further. People can’t afford trips, extras, luxuries. Many people who used to do better are now fighting to afford the basics. There are people who have worked for years and years with companies who are now letting long time workers go. If people aren’t working they can’t contribute to the government either. OUCH guys, didn’t think it would come back to bite you in your own behind now did you?

Linens and Things are another victim of the economy. They had 589 stores in 47 states. They are closing 177 of those. Multiply that out in just lost jobs alone and trace back what they sell in that store. They have products from all over the world including the United States. People make those products. Companies manufacture them. If no one buys, they are out of luck too.

The local food banks in my area are seeing more people come in but they aren’t getting as much food donated all the time either so their resources are being stretched. There is less to help each person with.

The local gas stations are mostly operated by individuals. Some of them are getting forced out of business. People with little or no work use less gas, buy less expensive and more efficient cars. That is great for the environment, so that has a plus side to it. Most gas station owners aren’t raking in the huge profits. They are just the little guys like rest of us, struggling to stay on their feet. Some have gone under. What do you bet though that the big oil companies still manage to post astronomical profits again next year?

Greedy investors in the gas industry and other places set a ball in motion this time that snowballed. It got away from them. It built up into an avalanche. Funny thing is avalanches take everyone down. It kind of reinforces the notion that those in charge don’t always make the best decisions.