Editors Viewpoint

Editor's Journal: A convenient excuse?

Andy Hanacek


Every time I turn on the TV, the computer or read the paper, I hear or see something about how the recession has changed our world. I hear or see excuses about how revenues were down because of the recession. I hear or see people losing their jobs or taking salary cuts because of the recession. Recently, I’m hearing and seeing a lot about local governments and such blaming the recession for budget shortfalls. Well, I’m tired of it.

The recent announcement by Morton’s Restaurant Group of a 14.7 percent decline in revenues in 2009 stands as one shining example of the hardships higher-end restaurants faced. On the retail side, discount stores such as Family Dollar have skyrocketed. Those two extremes on the “discount to high-end” spectrum support the “trade down” analysis widely accepted. Those are the simple examples to explain, and indeed, these hardships and success stories are real, not perceived — I get that.

But the conundrum I have arises from the companies in the middle of the spectrum.

While Chipotle Mexican Grill’s stock price, for example, slid significantly throughout 2008, it has been climbing since. This reflects the financial success the company has had during that time, with revenue also climbing in just about every quarter during that span.

Indeed, Chipotle serves burritos, but I suspect most people would not consider Chipotle to be a discount, low-end type of burrito — Chipotle’s own strategy and brand image does not allow it. The company thusly falls in that middle ground between high-end and discount.

There are restaurants and retailers in this space who are succeeding just like Chipotle, but many living in the same space are falling flat on their faces, citing recessionary pressures as causing the declines.

Yet, if the recession were the real culprit, why are some companies doing so well in comparison? Do they have a magic, “recession-proof” pill?

I’m sure the recession has affected plenty of companies — but the mistake is to blame the recession and assume things will get better with time. Now, as we work our way out of it, companies should challenge the models and strategies they’d followed to this point and change what has been exposed as faulty.

Because, at the end of the day, when a business fails, consumers really won’t care why or how for more than 10 minutes — they’ll simply gravitate toward the companies that provide stability and good news. Now, where’s my burrito?

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