Monday, February 27, 2017

The Effects of Missing Tax Refunds

Tax refunds may be a little slow in coming this year. Legislation passed in 2015 was aimed at preventing tax fraud - but it may also postpone funds being sent by the IRS to 25 million to 30 million U.S. households this year.

All told, the income tax delay may crimp consumer spending by as much as $21 billion in February, Goldman Sachs estimated earlier this month. One corner of the economy that is especially susceptible: restaurants.

At Jack in the Box, same-store sales may fall as much as 2 percent in the current quarter, while sales at its Qdoba chain may drop as much as 3 percent.  Meanwhile, same-stores sales at Red Robin have fallen by 4.3 percent in the most recent quarter. All those dining companies are blaming the slow refunds for the slowdown.

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