Back to the Steak House!

What’s Up with Wages Down?
March 7, 2016
They Must Really LOVE Tuna!
March 11, 2016

It’s Wednesday. Let’s head back to the steakhouse and our SHI!

Yes, just one week ago we bit into this tasty topic for the first time. Today, one week later, let’s see how our model is working. Remember, of course, we’re early in the process. I suspect we’ll need a many weeks of data before we can determine if my analysis is well done, which – in itself – is rare. As I’m sure we’d all agree, to accurately predict the future we really need both a crystal ball and a medium.

No, the bad puns will not stop. I’m just getting warmed up!

Back at www.opentable.com I discovered this Saturday – March 12 – is quite busy.  Much more so than last week.   Here’s the data chart from each…notice this week Ruth’s Chris is pretty full.  Mastro’s is identical and the rest show only a minor increase in bookings.

SHI Graphic

Recall that last week’s reading was a (-1).  This week our SHI reading is 22 – a significant lift.  Did Ruth’s Chris suddenly become more popular?  Has the economy improved appreciably in the past week?  What does this data tell us?

Nothing.  Not yet.  It’s too early in the process.

Recall that I’ve designed the model to permit potential SHI readings ranging from a high of 72 (meaning, every table at every time slot is booked) to a low of (-44) – meaning every table is available at each time slot.  Either is extremely unlikely to occur, and if one did, it would most certainly signify a Black Swan event.

I remain confident our foundational economic theory is sound.  People will adjust their behavior based on how flush they feel at the moment.  The probability of a table of four making a Saturday dinner reservation at a $50 plus per person (ppp) steak house must highly correlated with their individual and collective feelings about the financial and economic conditions in which they find themselves.  At that moment.  We all know this makes sense.

The consistency of our methodology, over time, should yield meaningful results.   Every Wednesday we will use the identical approach to gather, chart and calculate the data.  I do find the large move in the SHI this week a bit worrisome….  I believe much of the improvement can be attributed to the significant increase in bookings at Ruth’s Chris.  But as we’re only one week into this journey, it’s quite possible last week was the aberration and this week’s availability is more typical for this moment in time in our current economic cycle,   Time will tell.

So much to chew on!

  • Terry Liebman

 

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