Oversaturation Is Killing Restaurant Stocks

2017 has been a banner year for stocks. The S&P 500 is up more than 15%, and the Dow Jones Industrials and the Nasdaq have climbed even faster. However, one industry has been left out in the cold: restaurants.

Restaurant stocks, especially fast-casual and casual-dining companies, have largely underperformed the market as they wrestle with a number of challenges. Labor costs are rising, mall traffic is falling, and food deflation had made prices lower at supermarkets; but the biggest problem for the industry appears to be oversaturation.

Restaurants are seeing more empty tables. Image source: Getty Images.

Source: Fool.com