Parking Lots And Food And Drink Establishments (DISCLAIMER: IANAE and/or IANAA, I Am Not An Economist and/or I Am Not An Accountant.)

Last Sunday, while on my way to Jumbies, I took the south coast road and drove past TGI Friday's, Bubba's and Cheffette. As I drove past these establishments, I stole a quick glance at each of their parking lots. Most of them were full. Big deal, right? Maybe, maybe not. If we assume (yes, I know what they say about the word 'assume' and about assumptions in general) that the cars parked in each of the establishments' respective parking spaces belonged to patrons of said establishment, then a casual observer may quickly conclude two things: 1) that people have money to spend, that is, they have disposable income (better yet, discretionary income) and 2) that business is booming for these particular establishments.

The problem with both of these conclusions is that they may be somewhat misleading. Regarding the second conclusion, unless you had direct access to the sales figures of the establishment for a particular day, like Sunday, there would be no accurate way to tell if the establishment was making money (as in a profit). Even with these figures, it doesn't reveal much. The establishment may do ten thousand dollars in sales that night, however, this figure might only be representative of gross sales (the figure before overheads and expenses, etcetera, are deducted) and may not immediately show how much was pure profit (the figure after overheads and expenses, etecetra, have been deducted).

As for the first conclusion, just because people are spending money, it doesn't automatically mean that they can always afford to do so. Some people live beyond their means and, according to an old saying: "Have champagne tastes, but mauby pockets." Other people may have been invited to dinner by someone else and therefore do not have to pay for the food/drink they are consuming. It may also be a special occasion and people are celebrating by going out for dinner. It may even be a once-a-month kind of affair where a family, a couple or friends treat themselves to a night out on the town.

Thus, we can see that just because the parking lot of a food and drink establishment is full, it doesn't always mean that the business is making money (profit) and also, just because people appear to eat or drink out alot, it doesn't always mean that they can really afford to.

Labels: Barbados, economics, life, money

11:46 PM