In times of a recession, culinary arts schools and colleges see a huge increase in enrollment. This is due to a competitive job market. According to Ken DiSaia, vice president of enrollment at Johnson & Wales University, during the U.S. recession of 2002, the university was flooded with applicants for its culinary arts program. When a recession is in effect, culinary arts schools and colleges prosper. During times of expansion, however, enrollment drops.
According to the empirical paper "How to Outperform Your Competitors in Troubled Economic Times: Evidence from the Restaurant Industry," during the U.S. recession of 2008 and 2009, Americans had less disposable income. This translates directly into people not eating at restaurants. Adding to the problem is that people have to purchase essential products such as gasoline, leaving less for the luxury of dining out. The conclusion reached is that during times of recession, patronage at restaurants declines sharply.
After a recession, a time period of expansion sets in. A Yale School of Management analyst report states that in expansion times, demand outpaces supply in the restaurant industry. This is because consumer confidence in the economy rebounds. People have more disposable income and are willing to spend it at restaurants. The conclusion reached is in times of expansion, restaurant patronage increasessharply.
The culinary arts industry is keenly affected by the wholesale and producer price of foods. However, a difference exists between a large culinary arts chain and an independent owner-operated restaurant. The larger chain signs large cost contracts with producers, ensuring a constant cost, even if the price for raw materials goes up on the open market. For a large pizza chain like Papa John's, contracts are usually signed. For a small pizzeria, however, things are different. An independent restaurant does not have the buying power to sign a long-term contract, and has to buy food at the current price from wholesalers.
Labor and labor costs are tied in closely to economics. Market analysts from the Yale School of Management state that during a recession, labor turnover is lower due to a variety of factors. One such factor is no other jobs are available, and an employee feels secure in his job. Furthermore, in times of recession, management tenure is higher. Tenure means staying ability. A manager also feels thankful she has a job, and will not seek employment elsewhere due to a lack of job opportunities. This translates into lower labor costs during a recession -- and higher in an expansion..