PF. Chang’s and the Housing Market


It’s easy to cite the more obvious non-housing sectors being hurt by the subprime collapse. For example, there is pleasure boats, automobiles, big box electronics, etc.

But what aren’t places like P.F. Chang’s named more often? I like to think of that chain, and others like it, as being aspirational restaurants, sort of the eating equivalent of “prosumer” electronics. They are, in other words, mundane extrapolations that let the intermittently monied middle class stretch to show how they’d like to be, as opposed to how they actually are.

And you can see that by their locations too. Here in California the P.F. Chang location list is like a tour of subprime-hit housing.



  1. last time there was a serious economic cycle here in California (1997-2003) some interesting patterns emerged in restaurants. The “value chains” (

  2. Im a grad student.. and PF Changs is really not that expensive to me.. if not to me then who?

  3. Shouldn’t the reaction be substantially delayed, though? Foreclosures take a long time, and once you think you’re headed that way you stop paying your mortgage, taxes, and maintenance. That’s a very substantial amount of new cash available for consumables like meals and vacations. No reason to buy a big-screen television – creditors can seize that, but there’s not much they can do with three months of eating out at nice restaurants. (That’s a scary thought for consumer spending though – what if it’s artificially inflated by this sort of thing right now?)

  4. Not sure if the correlation can be made that precise. PF Chang’s, et. al. are located in large commerical areas with a high concentration of similar businesses. For example, the PFC in Walnut Creek, CA is in an urban center alongside Restoration Hardware, new movie theaters with $10 admission prices, wine bars with $20 glasses of wine, etc. This center attracts customers from a wide area, not only from eastern Contra Costa but also as far away as Solano and San Joaquin, which *are* three areas currently experiencing the effects of the housing semi-recession.
    Once you are out to Solano and San Joaquin, you are pretty much halfway to similar urban centers in Sacramento, etc, with the same mix of aspirational-oriented businesses.
    I’m sure the marketers at PFC and elsewhere are on top of this and know precisely who their customers are. Not to mention Wal-Mart!

  5. For that matter, what about $200 iPods and $600 iPhones? Why isn’t anyone talking about Apples exposure?

  6. One of your worst posts. Elitist and totally uncorrelated with any actual data.
    Palo Alto, Pasadena, Pleasanton? Rancho Mirage? Mission Viejo?
    You probably couldn’t find a single subprime mortgage in any of those zip codes.

  7. I’ve not personaly been into one but i was told it was nothing to shout about. But at least for the one that’s near me, it is located in a open lifestyle mall type setting and there’s only 2 of the settings in town. That’s good for them because it caters to the group that has the extra cash but a totally different story as to whether there’d be a line in there or there would ever be, subprime or not, tech bubble or not. Retail is pretty interesting, in Italy some buyouts occur not for the growth of the business but the underlying value of the real estate it is in.

  8. I’m afraid I disagree with this post, similar to John K (above). I recently visited the PF Chang’s just outside of West Palm Beach and was very impressed (so much so I blogged about the amazing service).
    Without hard data, I find it difficult to associate restaurant openings with sub-prime issues. Just look at their Web site in the news section…openings coming in Waikiki and Sandestin, Florida, for instance!