Is IHOP Exchanging Fat Poor Customers for Fat Rich Customers?

When even calorie-stuffed, low-income eatery IHOP DIN starts targeting a wealthier clientele, is that a signal to lower-income obese folks to consider eating salads at home rather than digesting a stack of carbs and calories covered in syrup at a restaurant. The dicey economy and the seeming permanence of 9-15 percent unemployment has left lower end restaurants searching for a client base that can afford to dine out. While this includes IHOP, it is a trend that has hit nearly the entire restaurant industry. McDonald's MCD, for example, has seen increased revenues in stores that upgraded to a somewhat classier motif. Granted, they still serve food that is only food in the strictest sense of the word, and you will be hard-pressed to find a nutritionist who recommends a daily Big Mac break. Still, they put in new counters and people have started buying their overpriced coffee, so they're going somewhere. All of this is the industry's response to a Bureau of Labor report, which showed that consumers making less than $40,000 cut back on their dining out expenses about five years ago. In a world of $4 gasoline and inflating food prices, lower-income families are struggling to feed their families, let alone considering dropping significant money on restaurants. That leaves IHOP and other establishments serving customers who no longer exist and unable to attract wealthier clients to what have long been lower-income hangouts. It would be a bit like Walmart WMT suddenly trying to recruit department store customers. What is interesting is to consider where lower-income folks will go when the economy does turn around. Will they find themselves unwelcome at their former haunts, driven out by higher prices and “classier” clientele? Will new opportunities arise for restaurants to emerge to serve them? Will everyone under the poverty line simply eat at Heart Attack Grill?