Trivial pursuit

Welcome to your first edition of trivial pursuit via The City Wire — an irregular feature meant to provide info that is likely entertaining and only accidentally informative in a useful manner. Enjoy.

RESTAURANT WOES
Rising unemployment, low consumer confidence, and severe weather conditions kept consumers from visiting restaurants this past winter, according to The NPD Group.

For the second consecutive quarter, restaurant traffic dipped below year ago levels as mounting job losses hurt lunch weekday visits and supper traffic declines continued, NPD noted in the report.

Foodservice traffic declined 1.5% from the same quarter a year ago, and total spending at commercial foodservice still rose but only by 0.05% as the average eater check size rose 2% over year ago levels.

The quick service restaurant (QSR) segment was down 1%, its first decline this quarter since winter 2003.

One bright spot for the restaurant industry this winter was that consumers, while cutting back on weekday visits, ate out more on the weekend, reversing a trend in previous quarters. As gas prices rose in summer 2008, consumers began pulling back on their foodservice visits on the weekend. This winter, as gas prices eased, customers began coming slowly back to restaurants on the weekend.

BROADBAND AIRPLANES
The number of broadband enabled airplanes will increase from 25 in 2008 to 800 in 2009, reports In-Stat. As a result, broadband hungry airline passengers will generate over $47 million worldwide in 2009. The in-flight broadband market is still emerging and will grow well beyond $1 billion annually by 2012.

Other info in the In-Stat report includes:
• In-flight broadband equipment revenue will nearly double between 2009 and 2013.
• Competing providers include Aircell, Panasonic and Row44.
• In-Stat forecasts more than 200 million annual in-flight broadband connects by 2013, with long-haul connects dominating over short-haul connects.

SEX SELLS
Rick’s Cabaret International, Inc., premier operator of upscale gentlemen’s clubs, recently reported that its sales in April climbed to a record $7.37 million, a 44.6% gain over April 2008 revenues.

The strong sales results were also fueled by Rick’s Cabaret New York City, which continued its record-setting gains; Tootsie’s Cabaret in Miami, which was ahead of its 2008 numbers; and by strong performances from two newly re-branded locations, Club Onyx in Philadelphia and XTC Cabaret in Dallas.

Same store sales were down 4.8% from April 2008, to $4.67 million, but the results were an improvement over the 7.6% drop during the most recent quarter ended March 31.

“Current trends are making us optimistic that we will continue to see stronger overall results moving forward if the economy continues to strengthen, including an increase in same store sales in future months,” the company (NASDAQ: RICK) noted in its earnings statement.

CAR KEEPERS
The current economy has many Americans shying away from buying new cars and hanging on to their cars longer than in years past, a new trend that raises important insurance and maintenance considerations, according to a Travelers press release.

A new poll from R. L. Polk & Co. revealed that 64% consumers said they were “very or extremely likely” to keep their current vehicle longer than they normally would due to economic conditions. Additionally, Polk reported that the average length of ownership of both new and used vehicles increased from a little more than three years in 2002 to nearly four years in 2008, a 24 percent increase.

Travelers, a provider of car insurance, is seeing the same trend of customers keeping their older vehicles longer. A higher number of older cars on the road increases risk and underscores the importance of having the proper coverage.

Encouragingly, regular maintenance is top of mind with respondents in the Polk survey. Specifically, 81% said they planned to take better care of their vehicle to keep it running longer.

CREDIT CARD CRUNCH
U.S. consumers fell past due and defaulted on their credit cards at record rates again last month, although the pace of deterioration showed signs of slowing, according to the latest Credit Card Index results from Fitch Ratings.

“While the slowdown in rate of delinquency increase could prove encouraging if it persists, it is too early to proclaim a trend,” said Michael Dean. “Chargeoffs and delinquencies will likely continue climbing over the near term.”

Fitch’s Prime Credit Card Chargeoff Index increased 48 basis points (bps) to 8.89%, the second consecutive record high. Chargeoffs have risen 18% since the beginning of this year and are now 44% above year earlier levels.

Fitch’s Delinquency Index, which tracks receivables greater than 60 days past due, posted its fourth consecutive record level rising to 4.44%.

Fitch expects chargeoffs to continue higher throughout 2009 and approach 10% by this time next year.